Statement in Connection with Planned Methodology Update for Environmental & Social Disclosure QualityScore

LONDON (April 21, 2023) – ISS ESG, the sustainable investment arm of Institutional Shareholder Services, today announced it will in the third-quarter implement a comprehensive update to its Environmental & Social Disclosure QualityScore scoring methodology. Planned enhancements will provide an improved measure of corporate disclosure practices, augment coverage of material issues, and buttress methodology transparency provided to subscribing investors and other stakeholders. The changes come against the backdrop of advances in industry disclosure standards.

More than 150 factors will be revised for greater relevance, close to 50 factors retired, and more than 60 new factors will be added. These additions are driven by the expansion of current disclosure coverage and the addition of new material topics. As a result of this methodology update, the Environmental & Social Disclosure QualityScore will be supported by 360 comprehensive and refined factors. The update will also include a review of the model’s materiality assessment, comprising an adjustment of category and factor-specific weights to better capture the depth and the extent of disclosure. Issuers within the coverage universe will have an opportunity to verify the new data in July prior to which ISS ESG will provide more granular details on the nature and scope of the planned enhancement.