Financial Ratings
[In Progress] : The place to understand what sustainability rating systems are being utilized in the ecosystem today and how each one operates.
“MSCI ESG Ratings aim to measure a company’s management of financially relevant ESG risks and opportunities. We use a rules-based methodology to identify industry leaders and laggards according to their exposure to ESG risks and how well they manage those risks relative to peers”
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Scores: Range from AAA to CCC: where AAA, AA are deemed leaders A, BBB, BB are deemed average and B, CCC are deemed laggards.
"Sustainalytics’ ESG Risk Ratings measure a company’s exposure to industry-specific material ESG risks and how well a company is managing those risks. This multi-dimensional way of measuring ESG risk combines the concepts of management and exposure to arrive at an absolute assessment of ESG risk. We identify five categories of ESG risk severity that could impact a company’s enterprise value.”
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Scores: Range from 0 - 40 +: where 0 - 10 is negligible risk, 10 - 20 is low risk, 20 - 30 is medium risk, 30 - 40 is high risk, and 40+ is severe risk.
“ESG scores from Refinitiv are designed to transparently and objectively measure a company's relative ESG performance, commitment and effectiveness across 10 main themes (emissions, environmental product innovation, human rights, shareholders, etc.) based on publicly-reported data.
Refinitiv ESG scores reflect the underlying ESG data framework and are a transparent, data-driven assessment of companies’ relative ESG performance and capacity, integrating and accounting for industry materiality and company size biases.”
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Scores: Range from 0 - 100: where 0 - 25 is First Quartile/Poor performance, 25 - 50 is Second Quartile/Satisfactory performance, 50 - 75 is Third Quartile/Good performance, and 75 - 100 is Fourth Quartile/Excellent performance.
“Bloomberg provides a variety of proprietary scores that investors can use to assess company or government disclosure and performance on a wide range of ESG and thematic issues. Bloomberg’s ESG and thematic scores can integrate into company research and portfolio construction.”
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Scores: Range from 0 - 10: where 0 is the worst and 10 is the best.
“FTSE Russell’s ESG Scores and data model allows investors to understand a company’s exposure to, and management of, ESG issues in multiple dimensions. The ESG Scores are comprised of an overall Rating that breaks down into underlying Pillar and Theme Exposures and Scores. The Pillars and Themes are built on over 300 individual indicator assessments that are applied to each company’s unique circumstances.”
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Scores: 0 to 5 where 0 = no disclosure and 5 = best practice.
“The S&P Global ESG Score measures a company’s performance on and management of material ESG risks, opportunities, and impacts informed by a combination of company disclosures, media and stakeholder analysis, modelling approaches, and in-depth company engagement via the S&P Global Corporate Sustainability Assessment (CSA).”
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Scores: Range from 0 - 100: where 100 is the highest and 0 is the lowest