ISS Launches New Sustainability Bond Ratings
ISS ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments., the sustainable investment-focused arm of ISS STOXX, announced today the launch of Sustainability Bond Rating, a new rating system aimed at providing investors with sustainability impact and risk assessment for corporate and sovereign green, socialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates., sustainability, and sustainability-linked (GSSS+) bonds.
According to ISS ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments., the new rating considers the sustainability impact and risk of the bonds’ issuers, as well as where the proceeds of bonds are being channeled, enabling investors to better evaluate bonds, including their external framework certification or second-party opinions (SPOs). The rating will also help investors fulfil reporting requirements such as the EU Taxonomy classification of securities in a portfolio or fund.
The new rating will provide a measure of absolute performance using a 12-point grading scale ranging from A+ to D-, and will be made up of three key dimensions, including Alignment with International Standards, EnvironmentalEnvironmental criteria consider how a company performs as a steward of nature. and SocialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Impact Assessment and the Issuer’s Sustainability Strategy, with each dimension further subdivided into topics and broken down into indicators.
Till Jung, Head of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. at ISS STOXX, said:
“The volume and complexity of labeled bond issuances has increased significantly in recent years, against a backdrop of disparate regulatory and market reporting standards. Our new, differentiated offering addresses investors’ key need for comparative insights on the material sustainability risks and opportunities of a labeled bond at issuance level.”
The rating draws on a pool of approximately 400 indicators, with an average of approximately 150 indicators per bond, evaluated based on the specific rating structures for each issuance type. ISS STOXX will deliver the new solution through a variety of channels to suit clients’ needs including through data feeds and API for faster integration, the firm said. Bond assessment is aligned with established international standards and guidelines on labeled bonds, the firm added.
