We are able to assess ESG issues on both quantitative and qualitative aspects. The qualitative overlay takes into account a forward looking analysis based on the firm-wide strategy and ambition.
The ESG analysis of issuers is carried out by grouping companies into peer groups based on geographic, sectorial and sample size considerations.
By creating a strong analytical framework around ESG research, the ESG team is able to make an independent judgement on companies' performance on a range of ESG indicators most relevant and material to their sector.
Our proprietary scoring methodology combines a quantitative scoring methodology, which is currently being enhanced, and a qualitative assessment. It then enables an ESG ranking of issuers. This information is disseminated firm-wide.
ESG analysts monitor and follow the sector's ESG evolution and the companies' ESG behaviour throughout the year. When a company faces a relevant change and/or controversy, it will be monitored and a meeting may be set up with the company. Depending on the outcome of the meeting, the analyst may raise or lower the company's score and rating (or even propose that the company be put on the exclusion list, depending on the nature of the issue/controversy).
As explained in section 04, Responsible Business Conduct and sector policies exclusions are reviewed quarterly - information from our external provider on UN Global Compact breaches is reviewed internally by our ESG research & Stewardship teams. They are then presented to the Sustainability Committee chaired by our CEO for final approval four times a year.
Finally, beyond integrating ESG evaluations into their investment decisions, the different FI teams may further integrate ESG into their risk ratings and analysis. For example, our Global Credit team integrate ESG-related risks at each step of their analysis process, thanks to a systematic Sustainability Risk Assessment.