EIRIS, a company that has been doing sustainable and ethical research for nearly 30 years, has distilled all of its experience into a new sustainability rating service.
EIRIS research has always focused on key environmental, social and corproate governance (ESG) risk areas, such as human rights, climate change, biodiversity, the list goes on… but the new rating system, announced March 23, combines all the key points together to provide a definitive but weighted assessment of sustainability performance.
Pulling in data from over 3,000 public companies – essentially, the FTSE All-World Developed Index – it offers sustainably conscious investors a long-desired tool by which to assess exactly how companies are performing.
EIRIS’ Mark Robertson explains in a little more detail: “There is a huge amount of work behind it, but it basically comes up with an A to E rating for each company, as well as a raw numerical score, which enables you to identify how companies are performing overall in terms of absolute performance, but also how they compare to their sector peers”.
The new service comes at a time when calls for a more responsible approach to capitalism are increasing and integration of sustainability risks into investment decisions is becoming more commonplace.
Executive director Peter Webster said, “This focus on sustainability comes at a crucial time for the investment market and also for the world at large with the Rio+20 Summit fast approaching. It is a challenging time but also a time of opportunity“.
Jessica Fries, executive chairman at The Prince’s Accounting for Sustainability Project, spoke at a recent EIRIS launch event and said, “Rio+20 is a step on the path towards sustainability, not an end goal in itself.
“The Rio+20 process presents an opportunity for investors to engage governments at national and international level and to establish frameworks to drive sustainable outcomes“.
EIRIS plans to update the service on an annual basis to take into account new ESG issues as they arise. In fact, Robertson told us that during development, the issue of water scarcity was the most recent indicator to be added into the mix: “We track the extent to which companies are exposed to water risk i.e., how much water they use, how reliant the business is on water, whether they are operating in areas of the world where water is particularly scarce.”
Given points raised at the recent World Water Day and drastic predictions from the OECD, it is an extremely timely addition. Assessing what policies, management systems and reporting protocols companies have in place do deal with such risks is the basis on which sustainability performance can be judged.
The annual update allows for a further positive outcome. “We’ll be able to benchmark sustainability performance over time to see how companies shift and get a feel as to which kind of factors impact on changes in ESG corporate performance”, says Robertson.
The new Sustainability Rating from EIRIS has just made the sustainable investment sector that bit clearer.
B> will be releasing a new in depth report called The Guide to Sustainable Investment on March 30. Contained within, you will find justification for investing sustainably, opinions from those in the sector, and some wise words as to how you can make a change in how you invest work for you and your values.
In the meantime, fill in our online form and we’ll put you in touch with a specialist who can guide you through sustainable investment at your own pace.