ESG Impact Ratings offer a comprehensive analysis of a company's performance in environmental, social, and governance (ESG) areas. These ratings reflect the ongoing evolution of sustainability expectations and help understand investment's ecological and social impacts from various asset classes.
What are ESG Impact Ratings?
ESG Impact Ratings reflect the performance of a company on aspects of sustainability and good practices. While traditional ESG ratings are mainly risk-based, ESG Impact Ratings emphasize impact, measuring how many positive effects have been created by an entity's operations at the expense of not causing as much harm to the environment or society and in governance.
Key Features of ESG Impact Ratings:
Business Activity Impact: The impacts of revenue-generating business activities are comprehensively assessed, taking into account the full lifecycle of the product and externality.
Granular Evaluations: In-depth assessments, which include disclosures and third-party reported adverse business practices that track overall sustainability performance.
Impact-Oriented Controversy Analysis: The analysis of controversies gives insight into the potential ESG-related issues and impact on the company's performance.
Comparable Ratings: Ratings are given on a letter scale (A- to D+), making it easy to compare companies as well as industries against each other.
Why ESG Impact Ratings Matter?
More information is brought to the investment decision regarding which investments better align with an investor's preference for sustainability. Investors are able to add more knowledge and wisdom in investment decisions through the ESG Impact Ratings about companies that not only handle risks efficiently but also contribute toward sustainable development.