ESG Risk Ratings

Get clear insights into corporate ESG risks  

ESG Risk Ratings

Corporate sustainability depends on accurate, independent data to evaluate and improve a company’s ESG performance. 

The world’s leading corporations, lenders and banks rely on our ESG Risk Ratings to identify and understand financially material ESG issues (MEIs) that can affect their organization’s long-term performance of their organization.  

Learn more about why Sustainalytics’ ESG Risk Ratings are the industry standard. 

Overview of Sustainalytics’ ESG Risk Ratings 

The rating offers clear insights into company-level ESG risk by measuring the size of an organization’s unmanaged ESG risk. This is measured by a unique set of MEIs, so it only considers issues which have a potentially substantial impact on the company’s economic value. 

The rating scores the ESG performance of more than 12,000 companies, from negligible to severe risk. The rating is comprised of three central building blocks: corporate governance, MEIs, and idiosyncratic issues (black swans). 

Risk rating
Companies

Comprehensive Coverage

Sustainalytics’ ESG Risk Ratings span more than 12,000 companies and covers most major global indices. Our ratings framework is supported by 20 material ESG issues, with detailed information on 138 sub-industries.

Risk levels

Categorize the Risk

ESG Risk Ratings are categorized across five risk levels: negligible, low, medium, high, and severe. View your rating, and expand your access to long-term responsible investors by improving your ESG risk management.

Framework

Benchmark Your ESG performance

Our Peer Performance Insights products use a company’s ESG Risk Rating to measure their performance against industry peers, helping to inform future ESG decisions and drive internal process improvements.

Measure of ESG Risk

Deep, Industry-specific Research

The ESG Risk Ratings are underpinned by more than 350 indicators (depending on the sub-industry) and 1,300 datapoints.

Materiality framework

Financial Materiality Framework

Examine the ESG issues posing the most material risks to your company’s performance. Our ESG Risk Ratings first measure a company’s exposure to industry-specific ESG risks, and then how well a company is managing those risks.

Forward

Forward-looking Signal

The exposure dimension of the ESG Risk Ratings is forward-looking because it considers a company’s susceptibility to the most material ESG risks, including risks that have yet to affect its financial performance.

Company assessment

Tailored Company Assessment

Our exposure assessment is tailored to match a company’s unique business model, considering its product portfolio, financial strength, geography, and historical controversies.

ratings

Comparable Ratings

Measure your rating against your peers: compare within your industry or sub-industry, at both the overall ESG and issue-specific risk levels.

How It Works 

We start with exposure, where exposure to each material ESG issue is initially determined at the subindustry level.
Next, we look at the management dimension, which measures how well the company is mitigating its exposure.
For some companies, a portion of its risk may be considered unmanageable. For example, an oil company is not able to fully eliminate all its risks related to carbon emissions so that is factored out of the calculation.
For the portion of risk that is manageable, a company’s performance is reflected by its policies, programs, practices and quantitative performance measures.
Controversies have a discounting effect on the company’s management score, as they show that the company’s programs and policies have not been completely effective and could lead to increasing risk.
Overall a company’s ESG Risk Rating is calculated by adding the amount of unmanaged risk for each material ESG issue.

Report Insights

Company ratings are categorized across five risk levels: negligible, low, medium, high and severe.

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A company’s risk is measured against its industry peers and against the global universe.

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Qualitative analysis, underpinned by analyst insights and quantitative data, describes the reasons why a company is exposed to specific material ESG issues and explains how well a company is managing these issues.

report 3

Material ESG Issues (MEIs) are identified and brought into focus.

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Transparency into company events that may impact a company’s operations, stakeholders or the environment.

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The magnitude to which a company is exposed to ESG risk and how well the company is managing that risk is measured and explained.

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Use Cases

banking solutions

Banking Solutions 

Banks and lenders can use our ESG Risk Ratings and data as a part of a broader analysis of their clients as well as for innovative product solutions such as sustainability-linked loans. 

Supply chain

Supply Chain Assessments 

With an ESG Risk Rating license, companies can share their rating with buyers looking for greater insights into their supply chain sustainability. Companies with large, globally diversified supplier portfolios can benefit from our ESG Assessment Platform. 

performance

Internal ESG performance 

Analyze your company’s ESG performance to determine areas of improvement and compare your score to industry peers. Identify areas of improvement and tie them to management or board renumeration. 

Investor relations

Investor Relations   

Leverage your company’s ESG Risk Rating to support capital raising activities such as the issuance of green, social, or sustainability bonds.  

Thematic Investing icon

Sustainable Financing 

Leverage your company’s ESG Risk Rating to access favorable rates for sustainability-linked loans or issue sustainability-linked bonds.  

marketing

Marketing and Promotional 

Raise awareness about your company’s ESG performance among internal and external stakeholders to help support your organization’s marketing and public statements. 

 

Corporate ESG in Focus

Read an overview of what ESG means for companies and their stakeholders, as well as the impact it can have on a company’s bottom line.

Why Sustainalytics?

Market standard

A Single Market Standard

Consistent approach to ESG assessments across the investment spectrum.

Award winning

Award-Winning Research and Data

Firm recognized as Best ESG Research and Data Provider by Environmental Finance and Investment Week.

End to end

End-to-End ESG Solutions

ESG products and services that serve the entire investment value chain.

Expertise

25+ Years ESG Expertise

350+ ESG research analysts across our global offices.

Largest second party opinion provider

Largest Second-Party Opinion Provider

As recognized by Environmental Finance and the Climate Bonds Initiative.

Related Insights and Resources

Sustainability-Linked Loans 2021: The COVID-19 Effect, ESG Ratings & Continued Popularity

The sustainable finance market has seen an exponential increase in size and activity in recent years. Innovative offerings such as green, social, and sustainable bonds, green and sustainability-linked loans (SLLs), and most recently sustainability-linked bonds, have contributed to the market’s incredible growth. In 2020, boosted by varied financial needs and mainstream recognition of environmental, social and governance (ESG) parameters, global sustainable debt capital surpassed US$700 billion, a 30% increase compared to 2019. Part of this capital was channelled towards tackling the effects of COVID-19 as government agencies, supranational bodies and corporates borrowed money to support areas most affected by the pandemic, such as healthcare. This shift in fund usage in 2020 resulted in the rapid growth of social bonds and a commendable first year for sustainability-linked bonds.

Tracking the Progress on Gender Equality through Sustainable Finance

A key result of achieving UN SDG 5 - Gender Equality is global economic development. However, as women globally were disproportionately impacted by the COVID-19 pandemic, the financing of activities that contribute to the empowerment and socio-economic advancement of women and girls will need to be accelerated to meet the goal by 2030. One option for creating targeted gender investment is the development and issuance of Gender Bonds that specifically support the advancement, empowerment, and equality of women.

Supply Chain Sustainability
Future-Proofing Supply Chains: Supply Chain Sustainability and Key Trends in 2021

Given the accelerating trends in sustainable supply chain management, integrating environmental, social, and governance (ESG) considerations throughout the supply chain will be a key priority for companies in 2021 and beyond.

Gender equality supply chains
Gender Equality in Supply Chains: An Opportunity to Increase Positive Impacts

It’s well known that inequalities between men and women still exist in the workplace. Women are less likely to fill senior leadership positions (29% in North America), earn less (81 cents per dollar in the US) and own fewer businesses (39% of businesses in the US) than men.

Related Products

Peer Performance Insights

Compare your performance to industry peers to drive ESG performance improvements.

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Use Sustainalytics’ ESG Risk Rating for marketing & promotion, sustainability-linked loans, and more.

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Second-Party Opinions

Get a second-party opinion on your ESG bond framework from the world's largest provider.

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