Innovative Ratings Approach Addresses Investors' Need to Understand Companies' Material Carbon Risks
AMSTERDAM, May 1, 2018 /PRNewswire/ -- Sustainalytics, a leading provider of ESG and corporate governance research, ratings and analysis, today launched its new Carbon Risk Ratings, which measure companies' exposure to and management of material carbon risks. The Carbon Risk Rating captures a variety of carbon signals in a single, quantitative assessment designed to support investment analysis, decision-making and reporting. The Sustainalytics' solution provides insights related to material investment risk that cannot be calculated through the traditional approach of carbon footprinting.
Investors are seeking to better understand their exposure to carbon risk given actions by influential groups such as the Task Force on Climate-related Financial Disclosures (TCFD) and the increase in climate change legislation worldwide. Sustainalytics' Carbon Risk Ratings enable investors to understand carbon-related risks and opportunities, engage with companies, develop new investment solutions and manage portfolio risk.
"Given mounting regulatory and industry pressures around climate change, investors informed us they need deeper insights that go beyond carbon footprinting and that reflect a focus on risk and financial materiality," said Michael Jantzi, Sustainalytics' chief executive officer. "Sustainalytics' Carbon Risk Ratings symbolize our commitment to build and deliver innovative, high-quality products and services that support investors' decision-making processes."
Sustainalytics' strategic business partner, Morningstar, today announced its new Morningstar® Portfolio Carbon Risk Score™, a measure that will help investors evaluate a portfolio's exposure to carbon risk. In addition, the company is offering investors a larger set of 70 carbon indicators as part of its Morningstar® Portfolio Carbon Metrics™.
"Together with Sustainalytics, we are advancing our shared goal to help investors make more informed decisions about their investments in low-carbon strategies," said Kunal Kapoor, Morningstar's chief executive officer. "Sustainalytics' Carbon Risk Ratings are the foundation for the Morningstar Portfolio Carbon Risk Score, which will allow investors to evaluate a portfolio's exposure to carbon risk and make a positive environmental impact."
Sustainalytics' Carbon Risk Ratings span more than 4,000 publicly-listed companies and encompass 147 subindustries. In addition to the Carbon Risk Ratings, investors have access to Sustainalytics' underlying research, including assessments of carbon intensity, stranded carbon assets exposure risk, fossil fuels involvement, and carbon solutions involvement.
"A holistic view of carbon risk is required by investors today," said Vikram Puppala, Sustainalytics' associate director of Carbon Solutions. "Our Carbon Risk Ratings look at unmanaged carbon risks in a company's operations and its products and services, offering investors a lens into the material carbon risks in their investments."
To learn more about Sustainalytics' Carbon Risk Ratings and its entire suite of Carbon Solutions, please visit here.
Sustainalytics 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. For over 25 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Sustainalytics works with hundreds of the world's leading asset managers and pension funds who incorporate ESG and corporate governance information and assessments into their investment processes. With 13 offices globally, Sustainalytics has more than 390 staff members, including over 180 analysts with varied multidisciplinary expertise across more than 40 sectors. Over the last three consecutive years, investors named Sustainalytics among the top three firms for both ESG and corporate governance research in the Independent Research in Responsible Investment Survey. For more information, visit www.sustainalytics.com.