The report looks at the key drivers of 10 ESG investment themes that are expected to create new risks and opportunities for investors. 2 Sustainalytics is the largest pure- play investment Publish ESG score in multiple mediums, e.g. Moderate Controversy level. Moderate controversy level. See DBS (D05.SI) environment, social and governance ratings to help you with your stock-buying decisions. Add to watchlist. Controversy level. None Severe. Category Impact on Environment or Society Risk to Company Company Score . Sustainalytics' analysts typically perform a thorough qualitative assessment and update the ESG Risk Ratings for companies on an annual basis. Data is updated every two weeks. Moderate controversy level. 5. scores and companies involved in controversial categories. The S&P 500 and the Dow Jones Industrial Average (DJIA) are two of the best known and most used indices in the world. Two scores available: 1) Thomson Reuters ESG Score, which measures a companys performance based on reported data in the public domain; and 2) Thomson Reuters ESG Controversy Score. Methodology: Thomson Reuters ESG Data covers 6,000 public companies across more than 400 different ESG metrics. Vertex receives a moderate controversy score because of the low environmental score. ESG Controversy research is updated as events occur. Sustainalytics provides ESG scores on companies, which are evaluated within global industry peer groups, and tracks and categorizes ESG-related controversial incidents on companies. Below we show ISS corporate governance3 scores, which range from robust (decile scores 1 to 3), average (decile scores 4 to 7) and weak (decile scores 8 to 10). COST. Significant controversy level. Social Risk Score Category Average. 18. ESG scores range from 0 to 100; controversy scores from 0 to 5, and Sustainalytics then normalizes scores across sectors. Controversy level. Sustainable energy companies are those which are engaged in alternative energy and energy technologies as described in the prospectus. However, with its environmental score of 62 and 55 and 51 in social and governance scores, it is a profitable option for investors looking for long-term ESG funds. The thresholds for exclusion within each category have been determined by BISL and are described in the table below. 24. Of these 400 company level ESG metrics, Arabesque S-Ray is a data tool created by Arabesque, a 4. Our methodology results in an improved composite ESG score However, scoring and qualitative assessments can be updated more frequently due to events assessment changes and corporate governance assessment changes, which are updated according to more frequent and different update cycles. The reference date for S-RayTM GC scores is the last business day of March. As of each rebalancing reference date, companies with specific Levels of Involvement, as specified and measured by Sustainalytics, are excluded from the eligible universe: Sustainalytics Product Involvement Sustainalytics Category of Involvement and Description Sustainalytics. 3. Structural adjustments to the rating (e.g., selection of material ESG issues, weighting of indicators) are done annually. Morningstars Portfolio Sustainability Score is an The Fund aims to maximise the return on your investment through a combination of capital growth and income on the Funds assets. Source: Sustainalytics Press Release, 27 May 2014. The global S-RayTM universe is ranked according to GC Score. Can companies provide feedback during the annual update process? Sustainalytics Involvement Proxy S&P DJI Level of Involvement Threshold Controversial Weapons: Tailor Made and Essential The company is involved in the core weapon system, or components/services of the core weapon system that are considered tailor-made and essential for the lethal use of the weapon. All the companies in the CareSaver KiwiSaver scheme's funds have been through a "controversy" screen. Negligible. Sustainalytics is a leading global provider of ESG research, ratings, and data, that has recently expanded its suite of high-quality ESG research, ratings, and data to support the increasing ESG needs of global investors. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Sustainalytics final ESG Risk Ratings score is a measure of unmanaged risk, which is defined as material ESG risk that has not been managed by a company. The Controversy Score gauges the seriousness of incidents related to a companytaking into account the intensity and impact of events impacting a business employingon a 1-5 scale, with 5 being severe. Controversy assessments are incidents that companies are involved in related to ESG issues, which Sustainalytics identifies and monitors in real 2. The impact on the ESG score depends on the weight assigned to the controversy. They are both designed to represent U.S. large-cap companies. Peers. ESG Risk Score for Peers. The aggregate performance score encompasses a companys level of preparedness, disclosure and controversy involvement across all three ESG themes. The report gives companies with involvement in the West Bank, Gaza and the Golan Heights a controversy score. 5. Sustainalytics is a company that rates the sustainability of listed companies based on their environmental, social and corporate governance (ESG) performance. An inhouse process is used to refine the S&P CSA data and arrive at the footprint scores. Significant Controversy level. 0. MSCI declined to comment when contacted by Reuters. Two scores available: 1) Thomson Reuters ESG Score, which measures a companys performance based on reported data in the public domain; and 2) Thomson Reuters ESG Controversy Score. 22. Companies with a category 4 or 5 controversy are automatically excluded. None Severe. Controversy level is (2), or moderate. c. The Company Sustainability Score is the firms ESG Score with the firms Controversy Score subtracted. b. 19: 1: 8: 10: Product Involvement Areas. I then placed a screen on the Sustainalytics controversy assessment. S&P DJI ESG Scores are the second set of ESG scores calculated by S&P Global ESG Research, in addition to the S&P Global ESG Scores that are used to define the Dow Jones Sustainability Indices constituents. Sustainalytics ESG Risk Ratings are typically updated once per year. The peer group classification is performed by Sustainalytics. Negligible. UNGC information is provided by Arabesque. In the event the R-Factor The report gives companies with involvement in the West Bank, Gaza and the Golan Heights a Last Update: Apr 15, 2021. Sustainalytics provides ESG scores on companies, which are evaluated within global industry peer groups, and tracks and categorizes ESG-related controversial incidents on companies. Controversy analysis highlights the incidents that have reputational risk and captures the severity of the event. OTP.BE. Example, for this sector, MTU scores the highest ESG rating of 81.6 and Dassault Aviation is at the bottom of the table with a score of 55. Data providers score companies on controversial behavior by rating them. DANONE. Social Risk Score. Controversy Assessments . ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Peers. Sustainalytics controversy assessment ratings feed into a companys overall ESG score. Sustainalytics is an independent ESG research and analysis firm supporting investors around the world with the development and implementation of responsible investment strategies. Significant Controversy level. 1. 29th percentile. Controversy Score (Updated: 13 Jun 2020) 2 Business Model & Industry Issues Sustainalytics risk score of 19.8 on 28 Apr 2021 is the best among domestic banks and CIMB is the only bank within our coverage to be rated low risk by Sustainalytics. Controversial events are those that have a negative impact on the environment or society, such as data breaches, allegations of accounting irregularities , and negative Category Average. The Fund invests globally at least 70% of its total assets in the equity securities (e.g. 13,000+ Companies Covered. 43rd percentile. Significant Controversy level. Morningstar then does the Sustainalytics ESG Risk Score and on the basis of comply or explain. 1. Because the relevance of particular ESG ESG Risk Score for Peers. Momentum indicators, which reflect ESG trends scores over time, Controversy assessments, To improve analysis and better identify trends over time, historical scores dating back to Leveraging smart technologies to monitor more than 700,000 news stories daily, Sustainalytics Controversies Research identifies companies involved in ESG-related incidents. Peers. 11. ASIANPAINT.NS. The sustainability ratings are based on two components: company-level ESG scores developed by Sustainalytics and ESG controversies. All companies at or below the bottom 5% of the GC score universe globally are ineligible. 1. The rating indicates the companys overall risk of experiencing material financial impact due to ESG factors, Sustainalytics We calculate an aggregated controversy percentile rank across E, S and G, using all 23 controversy topics. Name Total ESG Risk score E S G; GPDNF. some managers or products may shun entire industries or companies that have had a controversy. Sustainalytics has assessed Novartis to be the only company amongst peers to be Low Risk in 2021, improving from Medium Risk in 2020 and upgraded our overall score to 16.9 from 20.5 in 2020. Data for controversial categories is sourced from ESG data provider, Sustainalytics. Sustainalytics provides a controversy rating from one to five on companies and provides an associated assessment as well. ESG Mutual Funds. Moderate Controversy level. All Controversy scores are fully automated and objective. Yes. 15th percentile. Sustainalytics profits from the sale of an Occupied Territories Involvement Report. None Severe. Product involvement areas. Med. The weights depend on the peer group the company belongs to. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. We score each indicator between 0-100 and based on the weights assigned to each indicator, we assign each company an overall ESG rating between 0-100. The companys overall ESG rating was downgraded from medium risk to high risk by Sustainalytics, an ESG research firm owned by Morningstar, in its most recent report. Unfortunately, both quality and consistency of ratings can hamper the process. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Product involvement areas. Exhibit 1 Sustainalytics Controversy Score Category Impact on Environment or Society Risk to Company Company Score 5 Severe Serious 0 4 High High 20 3 Significant Significant 50 Social Risk Score Category Average. In addition, 10 companies are profiled, Results are based on aggregate stock weights in each category for the portfolio and the benchmark. See Alcoa Corporation (AA) Environment, Social and Governance Ratings to help you in your stock buying decisions. Total ESG Risk score. (See Glossary of Terms for ESG score / rating) However, scoring and qualitative assessments can be updated more frequently due to events assessment changes and corporate governance assessment changes, which are updated according to The need for ESG ratings to help investors construct portfolios in line with their ESG preferences is acute. 08/12/2020 Car makers may not be an obvious investment choice for ESG-conscious investors, but Morningstar analyst Tancrede Fulop says some of the largest companies score highly in some measures such as safety and human capital. with a similar market cap. Sustainalytics contacts issuers in our comprehensive universe to solicit feedback as part of our annual Category average. ESG Risk Score for Peers. In addition, the fund excludes companies on the basis of controversial behaviour and controversial products (including controversial weapons, tobacco, palm oil and fossil fuel). None Severe. Significant Controversy level. Sustainalytics' ESG Research and Ratings span more than 13,000 companies and encompass most major global indices. 3. Data providers score companies on controversial behavior by rating them. Material E issues 2. Moderate Controversy level. Not covered corresponds to securities Methodology: Thomson Reuters ESG Data covers 6,000 public companies across more than 400 different ESG metrics. Unless otherwise explicitly agreed in writing, usage for products and services, index creation, derivative work, portfolio or fund management, or any other usage are not permitted. The company was born of a merger between Toronto-based Jantzi Research, which was founded in 1992 by Sustainalytics' current CEO Michael Jantzi, and its European counterpart. Currency in HKD. However, scoring and qualitative assessments can be updated more frequently due to events assessment changes and corporate governance assessment changes, which are updated according to 2. Sustainalytics, ISS and CFRA analysis. Total ESG risk score. 3rd percentile. ESG Score Controversial Weapons Thermal Coal Tobacco UN Global Compact Score MSA Controversy Coverage (All) 18 Jun 2010 55 9 0NA 1 8 17 Jun 2011 62 12 0 NA 2 1 0 7 Sustainalytics Sustainalytics evaluates the degree to which companies are involved in Controversial Weapons, 5. Sustainalytics provides ESG scores on companies, which are evaluated within global industry peer groups, and tracks and categorizes ESG-related controversial incidents on companies. Morningstar then does Sustainalytics profits from the sale of an Occupied Territories Involvement Report. Sustainalytics, a Morningstar Company, is a leading independent ESG and corporate governance research, ratings and analytics firm that supports investors around the world with the development and implementation of responsible investment strategies. 4. 4. None Severe. The UK-based investor said leading agency MSCI had given Tesla a strong 9.3 score out of a maximum 10 for environmental risk and referred to the bitcoin foray as only a minor controversy in a February report. Eligible companies will have received scores on at least five of the relevant indicators (see Index Selection section). S&P DJI ESG Scores are used as the primary dataset in evaluating the ESG performance of each constituent company. Additionally, our negative controversy score has been downgraded to level 3 with neutral or positive outlook. 3. Peers. Gilead Sciences (NASDAQ: GLD) The maker of antiviral drugs receives a perfect environmental risk score of 0.0 from Sustainalytics, Inc. Gilead Sciences gets a perfect score because its government generates no pollution. is prone to controversy. Total ESG risk score. However, changes to ratings can occur if a company becomes subject to a serious controversial event (for example, human rights abuses, ethics violations, and so on). Mutual Funds work quite differently than ETFs. ESG Risk Score for Peers. Sustainalytics ESG Risk Ratings are typically updated once per year. Sustainalytics defines a controversy as any incident that has an impact on the environment or society, and therefore poses a risk to the responsible company and its overall sustainability performance. 4. Structural adjustments to the rating (e.g., selection of material ESG issues, weighting of indicators) are done annually. shares) of sustainable energy companies. The ESG scores are built up from the single indicator scores using a weighted sum. Category average. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Environment Risk Score. The total score for the environmental criteria per company follows the below stated formula: E i Our research shows that when exclu- None Severe. Environment Risk Score. NA >0% Controversial Weapons: Significant Negligible. Name Total ESG Risk score E S G; AMAT. Total ESG Risk score. Product Involvement Areas. Criteria: Roll-up: from ~400 metrics => 186 data points => 10 ESG Category Scores => 3 Pillar Scores and Pillar Weights => to the Refinitiv ESG Score (that also includes Controversy topics). Environment Risk Score. 11. Controversy Level. Product involvement areas. 5 Severe Serious 0 4 High High 20 3 Significant Significant 50 2 Moderate Minimal 80 1 Low Negligible 99 0 No evidence of controversy None 100 . In addition, those with S&P DJI ESG Scores in the bottom 25% of companies globally within their GICS industry groups are excluded. A controversy score is developed and updated by Morningstar and Sustainalytics and can be a measure of potential risk to the stock's value. 1-3 based on its degree of materiality. Controversy Level. The fund uses Sustainalytics as primary data source for monitoring the funds weighted ESG score versus that of the reference index. ESG risk score for peers. About the Nifty100 ESG Select Leaders Index Highlights The Nifty100 ESG Sector Leaders Index selects stocks from each sector of the Nifty 100 Index based on how well they have scored on the ESG Risk Rating Framework by Sustainalytics. None Severe. 4.460 -0.040 (-0.89%) At close: 4:08PM HKT. 4. Sustainalytics. Since Sustainalytics does provide an overall score and KLD does not, it could be said that possible clients of Sustainalytics put a higher importance to actually ranking the companies. Sustainalytics (see sidebar: Powered by Sustainalytics). Low Controversy level. LOWEST SCORE T FLAG 0/10 PERFORMANCE DASHBOARD Significant Controversies by Indicator Flag Score Global Compact Status Environment 10 No controversies were uncovered. DELL. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Sustainalytics' Peer Performance Insights gives an in-depth analysis of your companys ESG strengths and weaknesses compared to your competitors and industry performance. ESG scores range from 0 to 100; controversy scores from 0 to 5, and Sustainalytics then normalizes scores across sectors. Sustainalytics Controversy Score. First, each fund with at least 67% of assets covered by a company level ESG score from Sustainalytics receives a Morningstar Portfolio Sustainability Score. Environment, Social and Governance (ESG) Risk Ratings. Sustainalytics, a provider of ESG and corporate governance research, ratings, and analytics, released a thematic research report, 10 for 2017: Investment Themes in a Changing World, earlier this year. 4. The scores are based solely on Crisils proprietary framework and are set on a scale of 1-100, with 100 denoting best-in-class ESG performance and 1 representing the worst. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Social 1 Customer s 1 Anticompetitive Practices 1 Pass Customer Relations 4 Pass Marketing & Advertising 4 Pass Product Safety & Quality 3 Pass Human Rights & Community 9 Morningstar has licensed Sustainalytics company-level ESG analytics for use in various applications. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. A companys score can move anywhere between 6% to 15%, based on the controversy. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Total ESG Risk score. S&P Global 100 ex Controversial Weapons S&P Global 100 (WM) Index Exclusions. 14. About Morningstar: Morningstar's powerful ratings systems, world-class intelligence and research deliver the insights needed to make bold yet prudent sustainable investing decisions. Sustainalytics view is that the presence or absence of an MEI in a companys financial reporting is likely to influence the decisions made by a reasonable investor. According to a May 2020 Jerusalem Post article, an audit of five investment firms found that Sustainalytics had the most anti-Israel bias of the five, consistently tagging Israeli companies with more negative controversy ratings (e.g. None Severe. ESG Controversy research is updated as events occur. Infosys, Mindtree, TCS, Wipro, and Kotak Mahindra Bank scored 79,77, 75,75, and 74 respectively out of 100, which is comparatively reasonable. 20 Material ESG Issues. For example, Sustainalytics rates com - panies from 1 to 5, with category 5 defined as companies that have dis-played the most controversial behavior. Sustainalytics ESG Risk Ratings are typically updated once per year. None Severe. Total ESG Risk score. Controversial Company Report Controversy Report 1 1 1 1 1 1 Empowerment Sustainalytics GC MSCI GC Natural Capital 12/01/2018 EOS undertakes engagement with the company at Tier 1 level, Total ESG Risk score. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. 23. controversy score SContri = the Sustainalytics controversy score of company i Sustainalytics assesses a companys performance on ESG issues relative to other firms in the same global industry peer group, using a 0-100 scale. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Following its acquisition of GES International on January Sustainalytics delivers company ESG scores along with assessments of companies involvement in ESG-related controversies. Additionally, whenever a company listed on the index is involved in a controversy, Sustainalytics rates it on a scale of 1-5 (1 being a minor controversy, 5 being a major disaster). Governance risk score Category average. It can be concluded that the clients of Sustainalytics have a higher focus on selecting companies based on the position of the companies than the clients of KLD. controversy levels are provided by Sustainalytics, a global leader in ESG Research. 35 out of 459. And so Sustainalytics defines Exposure to ESG Risk and Management of ESG Risk and applies scores and opinions. Sustainalytics ESG None Severe. Controversy Assessment 7 Societal Development Index Companies that have a high controversy rating (i.e., 4 or 5) related to the following themes are indicators must be available to calculate score Sustainalytics-implied weighted average of the indicator scores Preserves relative importance of indicators as The S&P 500 ESG Index excludes tobacco, controversial weapons, and companies not in compliance with the UN Global Compact (UNGC). Low controversy level. The ESG score for Apple (ticker: AAPL) as calculated by Sustainalytics, for example, is 69, putting it in the 72 percentile of companies . Data is updated every two weeks. Category Average. According to the same article, Sustainalytics profits from the sale of an Occupied 10. Social risk score. NVDA. 26. Can companies provide feedback during the annual update process? Sustainalytics contacts issuers in our comprehensive universe to solicit feedback as part of our annual Output: (1) Refinitiv ESG Scores across 3 (E, S, G) Pillars and 10 Themes; and (2) Refinitiv ESG Score which is discounted for ESG controversies. funds weighted ESG score versus the reference index is measured using Sustainalytics ESG scores. 5. See RELIANCE INDS (RELIANCE.NS) environment, social and governance ratings to help you with your stock-buying decisions. Controversy level. Sustainalytics also considers a companys involvement in controversial or unexpected events when calculating an ESG Risk Rating score. Product Involvement Areas. When you invest in mutual funds, you are dealing directly with the companies that manage the funds. ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Negligible. The fund uses proprietary Carbon, Water and Waste footprint scores, that are based on S&P CSA data. Name Total ESG Risk score E S G; MU. None Severe. By contrast with Sustainalytics, ConocoPhillips was recognized as the top US ESG performer in the oil and gas upstream and Chart. Product Involvement Areas. identifying supposedly damaging information surrounding the company). For corporate professionals interested in direct competitor insights. ESG risk score for peers. 4. The average ESG score of companies covered by Sustainalytics globally is 53.36 whereas the average score of Industrial and Commercial Bank of China Limited (1398.HK) HKSE - HKSE Delayed price. 4. Governance Risk Score. 13th percentile. Sustainalytics, from Morningstar, scores a company based on its exposure to the ESG risks of an industry or region, accounting for a companys actions to manage that risk. We compare the ratings of two well-known ESG ratings providers to highlight why investors need to have a solid understanding of their providers methodology. Companies are excluded from the index if they are considered by Sustainalytics to be experiencing a High or Severe level of Controversy in one of three areas: Environment risk score. Summary. 4. Yes. 7. Each of the controversial events listed above received widespread media coverage and had or are having extremely serious environmental and social impacts. Statistics. Controversy Research Sustainalytics controversy assessments evaluate a firms involvement in negative incidents across primary ESG topics that First, each fund with at least 67% of assets covered by a company level ESG score from Sustainalytics receives a Morningstar Portfolio Sustainability Score. For example, Sustainalytics rates companies from 1 to 5, with category 5 defined as companies that have displayed the most controversial behavior. Thomson Reuters ESG Scores Score Range Grade 0.0 <= score <= 0.083333 D - 0.083333 < score <= 0.166666 D 17. controversial weapons, tobacco, palm oil and fossil fuel, military contracting, firearms and nuclear power). Name Total ESG Risk score E S G; A0H08K.DE. The ESG Risk Ratings are categorized across five risk levels: negligible (0-10), low (10-20), medium (20-30), high (30-40) and severe (40+). ESG data provided by Sustainalytics, Inc. Last updated on 5/2021. Applied Materials, Inc. 15: 5: 4: 5: LRCX.