ISS ESG has launched ESG Scorecards, an scoring tool enabling financial institutions to conduct ESG performance and risk assessments of private companies.

ISS’ ESG Scorecards allow industry-specific scoring of a private company’s ESG risk profile. Each ESG Scorecard includes an Industry Risk Profile that provides an overview and description of key sustainability risks as well as three, standard interactive scorecard elements covering Climate, Social, and Governance to address general sustainability risks and requirements. A classification of the impact of a company’s products and services under the UN Sustainable Development Goals (SDGs) and information on the relevance of the EU Sustainable Finance Taxonomy is also provided.

Kristina Rüter, Managing Director and Global Head of Methodology at ISS ESG said: “The methodology takes into consideration the entire value chain and materiality is reflected in the configuration and weight of each element while standardized assessment factors facilitate consistent and comparable assessments.” Use cases for ESG Scorecards include the assessment of ESG risk exposure of investee companies during due diligence processes for private equity portfolios, the evaluation of ESG risk during credit risk assessment, and to facilitate engagement with private companies regarding sustainability.

Till Jung, Managing Director and Global Head of ESG Products at ISS said: “Sustainability-related good practice frameworks and regulations are rapidly evolving and driving demand for ESG performance and risk assessments of private companies. Our decades-long ESG research and assessment experience reflected in the ISS ESG Scorecards enables industry-specific assessments that provide focus on the material issues most critical to clients.”