Examples of ESG Rating in a sentence
Sustainable characteristics are defined as an ESG rating equal or superior to BBB for developed market issuers and equal or superior to BB for emerging market issuers.
This ESG rating takes into account the companies’ main negative impacts in terms of sustainability, or Principal Adverse Impacts (carbon emissions, energy consumption, water consumption, waste production) and the risks likely to affect their own sustainability, or Sustainability Risks (regulatory and physical risks, reputational risk through, among other factors, monitoring of controversies).
The company’s overall ESG rating summarises the scores for each pillar according to the following weighting: 30% for Environment and Social and 40% for Governance.
An issuer’s ESG rating is based on an absolute rating scale of 0 to 100, with 100 being the highest rating.
In order to identify these issuers, both product and standard-based exclusion criteria (“negative screening”) and an ESG rating-based “best-in-class approach” are applied, which requires a minimum ESG rating for an issuer to be considered.
Based on the various data provided by our ESG partners (non-financial analysis agencies, external service providers, etc.), annual reports and reports on the social responsibility (CSR) of each company and direct exchanges with them, the analysts responsible for monitoring each stock draw up an internal ESG rating based on a quantitative and qualitative approach.
The analysts responsible for monitoring each stock determine an internal ESG rating based on both a quantitative (energy intensity, staff turnover rate, board independence rate, etc.) and qualitative (environmental policy, employment strategy, director competence, etc.) approach.
Each company has an ESG rating of 1 to 5 (with 5 being the highest score).
In evaluating a security based on the Sustainable characteristics, the Investment Manager is dependent upon information and data sources provided by internal research teams and complemented by external ESG rating providers, which may be incomplete, inaccurate or unavailable.
The selection of securities through the use of Amundi’s ESG rating methodology takes into account principal adverse impacts of investment decisions on Sustainability Factors according to the nature of the Sub-Fund.