ISS ESG Impact & EU Sustainable Development Goals (SDG) Solutions (9,700 issuers globally)

Effective impact investment strategies are needed to align investments with the UN SDG requirements. Obstruction to achieving the UN SDG objectives should be minimized and the resulting economic opportunities out of positive alignment can be seized. By being able to measure the impact, investments can actively support the transformation processes required to achieve these goals. Explore how ISS ESG SDG Impact Rating and SDG Solutions Assessment can assist investors seeking to align their investments to the UN Sustainable Development Goals. The SDG Impact Rating This solution provides a holistic metric of impact using the UN Sustainable Development Goals (SDGs) as a reference framework. The rating measures the extent to which companies are managing negative externalities in their operations across the value chain to minimize negative impacts, while at the same time making use of existing and emerging opportunities in their products and services to contribute to the achievement of the SDGs. The company’s impact is measured thematically, following the SDG framework, as well as at an aggregated level. For each of the seventeen SDGs, a company’s impact is determined by three pillars: • Products and services: Identify to what extent products and services contribute to or obstruct the SDGs • Operational management: Evaluate impact along the entire value chain • Controversies: Identify alleged or verified failures to respect established norms that may impede or obstruct the SDGs As result the SDG Impact Rating provides over 100 distinct data points per company, allowing for granular thematic assessments, as well as aggregate impact measurements. Coverage includes more than 9,700 issuers globally. Data for the SDG Impact Rating Products and Services Score as well as the Operational Performance Score are updated based on company disclosure such as annual and/or segment reporting, the company’s website and other documents such as sustainability reports or investor presentations. Data for the Controversy Score is updated continuously, based on relevant events, qualitative research, and ongoing news screenings. It is sourced from a range of reputable public sources in addition to feedback from company and stakeholder engagement. SDG Solutions Assessment This solution weighs the positive or negative impact of a company’s product and service portfolio towards 15 environmental and social objectives closely aligned with the UN SDGs. The assessment contains an aggregate score and objective-level scoring as well as a granular breakdown of the products/services assessed, in addition to the percent of net sales linked to each sustainability objective. The 15 sustainability objectives are used to assess companies’ product and services portfolios in terms of their contribution or obstruction towards sustainable development, qualifying the portfolio’s impact based on a five-level impact scale (from significant contribution down to significant obstruction). For each individual objective, a qualitative analysis is conducted to determine whether a product or service category makes a significant or limited net contribution towards attaining the objective; whether it has neither an explicitly positive nor an explicitly negative impact; or whether the product or service actually acts as a limited or significant obstruction towards attaining the objective. As a result, the positive and negative effects of different product groups may partly cancel each other out within a given objective. The individual product or service assessment is done along five categories, ranging from 'Significant Obstruction' to 'Significant Contribution'. The results are provided in form of Revenue Percentages, Objective Scores and the SDG Solutions Score. Objective Scores are based on the classification of products and services offered and their respective revenue shares. The SDG Solutions Score provides an aggregated assessment, taking into account a company’s most distinct objective impacts. The analysis is based on the percentage of revenues generated by a company from material products and services. While some companies report exact figures on relevant product sales, others only report on geographic segments or do not report segment sales at all. The analyst in charge of the assessment takes all relevant and available sources into account to estimate the share of net sales a company generates with relevant products. Coverage includes over 9,700 issuers globally, including some 6,800 rated entities.