LONDON (August 4, 2022) — ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc. (ISS), today announced it will provide EU Taxonomy data to augment the climate-related data already being provided under a framework agreement developed by the Eurosystem central banks. Deutsche Bundesbank, which acted as Lead Central Bank for the procurement process, entered into the climate data-related contract with ISS earlier this year and more recently augmented with EU Taxonomy data.
By way of background, last year, the Eurosystem central banks–19 national central banks of the euro area countries and the European Central Bank (ECB)–defined their common stance for applying climate-related sustainable investment principles in euro-denominated Non-Monetary Policy Portfolios (NMPPs), that they each manage under their own responsibility. Within the agreed common stance, all Eurosystem members aim to start climate-related disclosures for the NMPPs in Q1 2023, including the measurement and disclosure of greenhouse gas (GHG) emissions, using the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) as the initial minimum framework and reporting, in the category of metrics and targets.
As part of the procurement process, Deutsche Bundesbank sought to identify a provider that could assist the Eurosystem central banks with calculating their exposures to EU taxonomy-aligned activities. ISS ESG has built data, analytics, reporting and advisory capabilities to help banks navigate the requirements of the EU Taxonomy, providing support to banks’ risk management teams on EU Taxonomy guidelines and disclosure requirements.
ISS ESG’s EU Taxonomy Solution leverages the technical screening criteria from the delegated acts for activities substantially contributing to climate change mitigation and climate change adaptation, the first two of the taxonomy objectives to have been defined. The solution will also encompass the remaining four taxonomy objectives, as well as directly reported data from corporates themselves, anticipated to be delivered by the end of 2022, ahead of the relevant regulatory deadline. The EU Taxonomy Solution currently has approximately 1,000 taxonomy-specific screening factors across the full eligibility and alignment assessment, including substantial contribution, “do no significant harm” and minimum social safeguards. This will enable banks and other covered financial market participants to fulfil their compliance obligations in Q1 2023.
About ISS ESG
ISS ESG solutions enable investors to develop and integrate responsible investing policies and practices, engage on responsible investment issues, and monitor portfolio company practices through screening solutions. It also provides climate data, analytics, and advisory services to help financial market participants understand, measure, and act on climate-related risks across all asset classes. In addition, ESG solutions cover corporate and country ESG research and ratings enabling its clients to identify material social and environmental risks and opportunities. For more information, please visit us at: www.iss-esg.com
Sarah Ball, Executive Director