Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Proxy adviser Institutional Shareholder Services Inc. is getting into the business of rating corporate reporting on issues such as climate change and human rights.
The firm, which already looks at the quality of company disclosures on executive pay and other governance issues, said Feb. 5 it’s now scoring companies on what they do, and don’t, disclose on environmental and social topics.
Its move into environmental, social, and governance (ESG) ratings comes after a string of ISS acquisitions in the space, including that of sustainable investment adviser Ethix and most recently South Pole Group’s carbon data and analytics.
Marija Kramer, who heads ISS-Ethix, the firm’s ESG investment arm, said it’s driven by increased investor interest in how companies are managing environmental and social risks. Investor pressure is also making companies more interested in the scores they receive from other raters like MSCI Inc. and Sustainalytics BV.
“Investors are looking at, in some cases, their quite vast portfolios and trying to identify candidates for shareholder engagement,” Kramer told Bloomberg Law.
She said the new ISS scores could help investors target companies that lack transparency or those with low-quality disclosure. Investors could also use the scores to help decide how to vote on pay packages, director elections, and other matters at companies they own.
Starting later this month, top-level environmental and social scores will be added alongside governance scores to the company reports ISS sends to investors that subscribe to its voting advice. The scores won’t impact its benchmark voting recommendations, but the proxy adviser’s roughly 400 clients with customized voting policies could factor them into their decisions.
ISS will initially score about 1,500 companies in energy, materials, and other industries that are viewed as most exposed to environmental and social risks. It plans to expand its coverage to more than 5,000 companies globally.
To contact the reporter on this story: Andrea Vittorio in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)