ESG Risk - 2024 Methodology Update

Summary (What?)

On April 30th, we introduced and enhanced ESG Risk methodology to our production environment. You can now check the revised organization scores.

• Description of changes
• Release Notes (Excel)
• ESG Risk Data dictionary (Excel)

Business impact (Why?)

Why: To enhance the quality of the analysis and ensure better alignment with mandatory disclosures and industry-wide frameworks, as part of our commitment to providing cutting-edge methodologies for sustainability assessment

Product change: Our solution will now incorporate the latest trends in climate analysis and regulatory compliance with:

• 13 new metrics in the ESG Risk companies framework
• 4 new metrics in the ESG Risk sovereigns framework
• 10 metrics tagged as legacy (deprecated) and removed from the default industry-consensus scoring profiles
• Updates in the structure of ESG categories and subcategories

Modules and Endpoints impacted (Where?)

List of endpoints by module impacted by this release:

New Features (How?)

1. 13 new metrics are added to the ESG Risk companies framework. We are expanding the set of metrics offered to better cover the topics of:

   • Climate change, with metrics related to Net Zero targets, alignment with the Science Based Targets initiative, and more.
   • Diversity, with metrics related to gender pay gap and diversity of opportunity targets.
   • Metrics derived from the EU SFDR's Principal Adverse Impact (PAIs), including indicators like the CEO pay ratio, violations of the UN Global Compact and the OECD Guidelines for Multinational Enterprises, and others.

2. 4 new metrics are added to the ESG Risk sovereigns framework. We are expanding the set of metrics to offer:

   • Freedom House Index
   • Press Freedom Indicator
   • More detail of country-level emissions data by incorporating metrics for Domestic Emissions (Scope 1) and Imported Emissions (Scope 2 + 3)

Please see the complete list of metrics included here in the tab: New_scoreids

Enhancements (How?)

1. Amended set of categories and subcategories in the ESG Risk companies framework. ESG risk categories and subcategories have been reassessed to enhance the representation of relevant sustainability themes, by:

   • Establishing a new category specifically for Climate Change to underscore its significance.
   • Consolidating some existing subcategories.
   • Renaming certain categories and subcategories to better align with their inherent nature.

Please see the complete list of changes here

• List of new and deprecated categories in the tabs: New_scoreids and Deprecated_scoreids.
• Detail of changes within the categories and subcategories in the tab: Metric_changes_companies

Deprecated Endpoints or Features (How?)

1. Legacy Metrics: These metrics have been removed, as they are consistently not being reported and/or they are not included in relevant frameworks such as SASB. To facilitate transition, these will continue to be available in custom scoring profiles until the end of 2024.

Please see the complete list of metrics included here in the tab: Deprecated_scoreids

Go-live date (When?)

30/Jan/2024