Sustainability Reports Help Investors Manage Risk

Sustainability Reports Help Investors Manage Risk

Environmental and social issues including climate change, energy use and labor and human rights practices are quickly becoming issues for mainstream investors as well as shareholder activists. Institutional Shareholder Services, which is a major provider of corporate governance and proxy voting services, has announced that it will create a global Sustainability Risk Reports database.

Drawing on an extensive set of over 400 environmental, social and governance (ESG) factors, ISS's company profiles offer in-depth qualitative analysis to help assess and compare companies' ESG performance across industries. The increasing importance of ESG issues is leading institutional investors to take sustainability considerings into account more thoroughly when looking at investments.

"Shareholders not only expect their asset managers to know whether companies are acting as good corporate citizens, but also to consider ESG performance when managing their portfolios," said John Deosaran, a vice president at ISS. "With ISS's Sustainability Risk Reports database, investment managers can identify those ESG factors that best align with their client-driven mandates, and determine appropriate investment weightings, turning compliance priorities into a competitive edge."

Among the many factors assessed in the ISS reports are carbon emissions, energy use, labor standards and ethics. ISS also analyzes each company's disclosure practices, adherence to ESG policies and its Board's oversight of ESG issues.

"Investors are asking increasing numbers of companies to provide more information around their ESG efforts, yet disclosure practices vary widely," said Deosaran. "To obtain a comprehensive picture, investors need a consistent framework to evaluate ESG practices. ISS' Sustainability Risk Reports database offers a uniform methodology to benchmark companies’ sustainability actions so investors can make more informed investment choices."

More information about the risk reports is available at