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

ISS Sustainability Solutions, the sustainable investment arm of ISS STOXX, today announced it will in the fourth quarter implement an update to its Environmental & Social Disclosure QualityScore scoring methodology.

Environmental & Social Disclosure QualityScore (ESQS) is a data-driven scoring and screening solution designed to measure and identify areas of environmental and social risk through company disclosures. Scores provide an indication of the relative quality of corporate disclosures and transparency compared with industry peers and are supported by factor-level data.

Sustainability reporting and disclosure expectations evolve and mature over the years. In order to keep aligned with these developments, the ESQS dataset is being revised to better evaluate covered companies’ disclosure preparedness and provide comparably reported data to subscribing investors.

As part of the methodology update, thirty-five factors will be added, including more detailed data points regarding Scope 3 GHG emissions, business ethics, as well as health and safety. For approx. twenty factors, new answer options will be added to better account for company-specific assessments. Furthermore, nine factors will be removed entirely, with another two factors removed from some industries, due to their decreasing relevance.

Issuers within the coverage universe will have an opportunity to verify the new data in late September prior to which ISS Sustainability Solutions will provide more granular details on the nature and scope of the planned enhancements.