ISS ESG’s dedicated team of climate change experts provide financial market participants, governments and universities with market-leading carbon and climate data and state-of-the art portfolio analytics.
PORTFOLIO ANALYTICS
The Portfolio Analytics reporting tool on our proprietary DataDesk platform enables investors to assess their exposure to climate risks with the click of a button. For public equity and fixed income strategies, the Climate Impact Report provides detailed analyses of Scope 1&2 and Scope 3 emissions, transition and physical risks and climate scenario alignment based on IEA, NGFS and OECM models, including scenarios aligned to Net Zero emissions by 2050 that are based on the Glasgow Financial Alliance for Net Zero (GFANZ) recommendations.
FULFILL REPORTING REQUIREMENTS
The reports are designed to support investors who want to align their portfolios to the Paris Agreements goal of maintaining a 1.5°C trajectory. Furthermore, the reports can help investors address key internal and external climate disclosures, including TCFD-based reporting initiatives where climate scenario analysis and scenario alignment are core elements of the disclosure requirements.
KEY METRICS
TCFD METRICS
Includes the TCFD’s weighted average carbon intensity and additional metrics assessing climate-related risks and opportunities.
SCENARIO ALIGNMENT
Assessment of a portfolio’s alignment with up to 22 climate scenarios provided by leading models: International Energy Agency’s World Energy Outlook 2022 (IEA), the United Nations Environment Programme’s One Earth Climate Model (OECM), and the Network for Greening the Financial System (NGFS). The analysis includes implied temperature rise, cumulative alignment metrics, cross-point year, and transparency indicators.
STRESS TESTING
Analyse how different climate scenarios can impact the financial performance of your portfolio.
CARBON FOOTPRINT DATA
Scope 1&2 and Scope 3 emissions, including emission intensities.
TRANSITION RISKS
Detailed assessment of company and portfolio exposure to transition risks and opportunities related to carbon pricing and demand changes, impacts on operating costs and revenues, fossil fuel reserves, power generation, and controversial energy extraction practices. Includes forward-looking returns-based analysis quantifying the potential financial impact of a net zero scenario.
PHYSICAL RISKS
Provides estimates of financial impact due to increasing hazard intensity for the most likely and worst-case scenarios by 2050 across the five most costly weather hazards: floods, heat stress, wildfires, tropical cyclones, and drought.
AVAILABLE REPORTS: Climate Impact Report, Carbon Footprint Report
ISS ESG’s Physical Climate Risk Analysis: Gauging Climate Change Impacts on Your Portfolio
Investors want to deepen their understanding of the financial impact of physical climate-related risks on their investments. With climate change expected to increase the occurrence and intensity of severe weather hazard impacts, the value of your portfolio holdings might be affected.
This video explores ISS ESG’s physical climate risk analysis tool, which enables investors to model hazard intensity increases, for likely and worst-case scenarios by 2050, across five of the costliest hazards: wildfires, tropical cyclones, heat stress, floods, and drought.
CLIMATE RISK & IMPACT DATA
Access the broadest and deepest carbon and climate data set in the market.
- Forward-looking assessment of the climate-related performance of companies, taking into account industry-specific challenges and risk profiles as well as companies’ positive impact.
- Assessment of companies’ involvement in the extraction of fossil fuels, and the generation of power from fossil fuels, nuclear and renewable sources.
- Proprietary analysis based on latest available peer-reviewed climate models (CMIP5)
- Includes Physical Risk Score allowing peer comparisons, Value at Risk and Phyiscal Risk Mananagement Score
- Assessment of a portfolio’s alignment with up to 22 climate scenarios provided by leading models:
- International Energy Agency’s World Energy Outlook 2022 (IEA)
- The United Nations Environment Programme’s One Earth Climate Model (OECM)
- The Network for Greening the Financial System (NGFS)
These pathways also include Net Zero emissions by 2050 scenarios based on the Glasgow Financial Alliance for Net Zero (GFANZ) recommendations.
- The analysis includes implied temperature rise, cumulative alignment metrics, cross-point year, as well as a suite of methodology indicators that can allow for better transparency (e.g. carbon budget type allocation, regional granularity, and expansion degree).
- Includes data on output and installed capacity derived from power generation from fossil fuels (coal, oil, and natural gas), renewable energy (wind, solar, hydro, biomass, geothermal, and nuclear power), and other sources.
Broad coverage with >75 Sovereign Risk Exposure and Climate Data factors, including:
- Absolute and intensity greenhouse gas emissions data from production emissions (as reported to the United Nations Framework Convention on Climate Change (UNFCCC)) and government emissions, aligned with the PCAF methodology, and
- Transition Risk and Climate Policy Ratification, including data on sovereign energy mix and fossil fuel dependency and reserves.
- Alternative asset classes: e.g. private loans, real estate, and infrastructure
- Potential Avoided Emissions: e.g. companies, infrastructure, and green bonds
- Environmental Impact: e.g. deforestation and water
- Detailed assessment of absolute and relative Scope 1, 2 and 3 greenhouse gas emissions
- Bespoke analysis of transition and physical risk as well as scenario alignment possible
- Allows banks and insurance companies, that need to comply with mandatory climate-related disclosure frameworks, such as the Corporate Sustainability Reporting Directive (CSRD) and European Banking Authority (EBA) Pillar 3, to estimate emissions for non-listed companies, small and medium enterprises, and other alternative investments.
SUPERIOR COVERAGE
Scope 1 and 2 emissions based on reported data, and Scope 3 emissions based on a sophisticated emissions modeling methodology
ROBUST METHODOLOGY
Established in 2010 and developed over three years with scientists from ETH Zurich with over 800 climate-relevant sector and subsector-specific models allowing you access to Scope 1&2, and upstream/downstream Scope 3 emissions based on sector estimates.
END-TO-END SOLUTION
Holistic coverage of carbon-, physical-, transition-, and scenario risks that can be used for reporting, portfolio optimization, engagement and voting.
