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Profundo

Service Provider Reporting Framework 2017

You are in Research and Data Provision » Research/process level

Research/process level

RDP 02. Sources for research and/or rating

02.1. Indicate the types of sources you use for research and/or ratings of companies. Tick all that apply.

          Interviews with the company representatives.
        

02.2. Additional information. [OPTIONAL]


RDP 03. Stakeholder input

03.1. Describe how you actively include inputs and information, wherever possible, from relevant stakeholders or interested parties, in the research process or in reaching assessment conclusions.

          We use sources (reports, press release and other news items) of NGOs to describe their concerns on a particular matter, their expectations from companies and their proposed solutions for conflicts or controversies that companies or other parties scrutinized are involved in. These NGOs are important stakeholders for the companies and financial institutions and their perspectives are valuable. They form the basis of our research.
        

03.2. Additional information. [OPTIONAL]


RDP 04. ESG factors in research methodology

04.1. Indicate whether your research/rating methodology incorporates ESG factors.

04.2. If yes, describe how ESG factors are incorporated into your research/rating methodology.

          All our rating assignments are focused on ESG factors. We do not rate companies or banks on any other parameter.
        

04.4. Additional information. [OPTIONAL]


RDP 05. Material ESG issues in research and/or rating

05.1. Describe how you ensure that your research and/or ratings capture material ESG issues.

          Profundo conducts research on various sustainability issues such as water scarcity, waste management, climate change, tax evasion, biodiversity, human rights encompassing a wide range of sectors/companies such as mining, oil and gas, weapons, tobacco, pharmaceuticals, and chemicals. Therefore, we believe that ESG underlines all our research offerings and our expectation from the society at large.
        

RDP 06. Up-to-date assessment and ratings

06.1. Describe how you ensure your assessment of companies is up-to-date and that new information is incorporated or new assessments are conducted at reasonable intervals.

          Our research on assessment of companies and banks’ responsible investment practices for some of our clients is conducted at regular intervals: yearly or once in two years. This ensures that any new initiatives or commitments of companies and banks are reflected in the most recent versions of our reports. Since we do not offer any off-the-shelf research, our analysis is always dependent on our client’s requirements and thus sometimes it is not a recurring assessment.
        

RDP 07. Balanced research and assessment

07.1. Indicate how you ensure a balanced approach to your research methodology and assessing/rating of companies. Tick all that apply and explain your approach to each option.

Type of indicators

Explain your approach

          Our research or assessment of any company or banks include qualitative and quantitative indicators. For example, for evaluating a company’s environmental commitment we look at their policies as well as the KPIs such as the trend of GHG emissions. A reducing trend of GHG emissions indicates that the company doesn’t only have a policy but also measures result and progress of its commitments. This approach is implemented on every theme that the company is being assessed on and gives a holistic view of its ESG progress.
        

Explain your approach

          To evaluate management indicators we include management commitment, the overall seniority of responsibility of the issue in the organisation, frequency of management discussion and how this process is integrated on a group level given the global operations of any company. We ensure in our assessments that management commitment is reflected through right indicators.
        

Explain your approach

          Our research or assessment of any company or banks include qualitative and quantitative indicators. For example, for evaluating a company’s environmental commitment we look at their policies as well as the KPIs such as the trend of GHG emissions. A reducing trend of GHG emissions indicates that the company doesn’t only have a policy but also measures result and progress of its commitments. This approach is implemented on every theme that the company is being assessed on and gives a holistic view of its ESG progress.
        

Explain your approach

          We ensure that all the ESG parameters are covered in our analysis. ESG factors could have different weights in different sectors for example environmental issues have more weight in extractive sectors and social issues could be more important in agriculture sector. While designing assessment methodologies we strive to ensure right balance of the three pillars of sustainability: ESG.
        

Explain your approach

          We always suffer with the discrepancy between self-reported and public data. The companies or banks under evaluation that agree to provide information and participate actively in the research process get the benefit of scoring high as against the companies or banks that do not participate. In our view, this is also an indicator of a company or a banks preparedness and their commitment towards ESG issues. We believe it is fair to reflect the difference in the scoring. It may act as an incentive to participate and be more transparent for the companies and banks to get better rankings and scores.
        

07.2. Additional information. [OPTIONAL]


RDP 08. Consistency and comparability

08.1. Describe how you ensure that your criteria and methodology are consistent and applied equally to comparable subjects of research.

          The methodologies that we develop are flexible and adaptable to different companies. For example, while evaluating  banks the methodology adapts when a bank is not active in asset management. The scoring and criteria is adapted automatically to distribute the scores on relevant businesses and does not penalize a bank on asset management specific indicators.
        

RDP 09. Emerging ESG issues and trends (Private)


RDP 10. Client use of outputs (Private)


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