ISS ESG Releases Latest Global Climate Change Update Report

NEW YORK (December 7, 2023) — ISS ESG, the sustainable investment arm of ISS STOXX, today released the latest report in its Thought Leadership Collection series, 2023 Global Climate Change Update: Recent Developments and Key Themes in Climate Change-Related Issues Globally. The timely new report is released as policymakers and business and finance leaders from across the globe convene at the COP28 climate conference, and many institutional investors take stock of the complex climate-related risks, challenges, and investment opportunities to which they may be exposed.

Till Jung, Managing Director, Head of ISS ESG, comments, “In this latest report, ISS ESG’s climate specialists and dedicated engagement team examine key aspects of climate-related investment risks and opportunities and identify data and tools that can support investors in negotiating these issues.”

Key chapters from ISS ESG’s 2023 Global Climate Change Update report include:

• Climate Change Regulation and Standards in 2023: CSRD/ESRS, ISSB, and U.S. Legislation Climate change regulation and standards continue to expand, and the notable emergence of the European and global disclosure standards opens opportunities for greater transparency on companies’ climate-related activities.
• Corporate Climate Governance: A Subject of Growing Investor Scrutiny Climate governance faces growing investor scrutiny and is increasingly being incorporated into frameworks such as the Climate Action 100+ (CA100+) and the Net Zero Investment Framework (NZIF). Companies seeking resilience against climate change and compliance with current climate governance recommendations may consider governance measures such as board oversight of climate-related risks and opportunities, linking executive remuneration to climate performance, and retaining senior leadership with adequate climate skills.  Available evidence suggests climate governance measures are positively associated with GHG emissions disclosure and progress towards Net Zero.
• Terms of Engagement: Investor Challenges on the Road to Net Zero The twin goals of both decarbonizing a portfolio and reaching alignment and engagement targets can be in tension with each other. While switching funds to low-emitting sectors is one route to rapid decarbonization of a portfolio, the negative impact of such a strategy on a portfolio’s alignment progress should also be considered. This is particularly so when existing investments may reside in high-emitting-sector leaders that may also have a highly developed and mature strategic approach to mitigating climate change and to strategically achieving Net Zero.
• A Guide to Climate Scenario Analysis: A Framework of Guiding Principles Climate scenario analysis can support the re-direction of capital and re-alignment of portfolios with science-based emissions-reduction pathways. Financial institutions can use such pathways to explore a range of possible futures and the implications for their strategies, plans, and investments. ISS ESG provides a framework to assess different emissions-reduction pathways and to explore five leading Net Zero pathways. It also examines barriers to wider adoption of climate scenario analysis, such as how differing sectoral and geographic granularities constrain the application of climate scenario analysis to different companies.
• Climate Controversies: How Safe Is Your Investment? This chapter provides an overview for investors of the types of risks that could occur across various stages of a fossil fuel-based or industrial project. Companies directly or indirectly involved in such projects may receive increased scrutiny from regulatory authorities, civil society, and investors. Risks such as controversies, norms violations, and transition and physical risks may arise.

To download a copy of the full report, please click here.

About ISS ESG

ISS ESG solutions enable investors to develop and integrate sustainable investing policies and practices, engage on responsible investment issues, and monitor portfolio company practices through screening solutions. ISS ESG 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

About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.

Media Contact:
Sarah Ball
Executive Director, Communications
press@issgovernance.com