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Sustainability Excellence Management Consulting Ltd.

Service Providers Framework 2019

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/sectors/geographies or similar. Tick all that apply.

02.2. Indicate how ESG factors are incorporated into your research and/or rating methodology

02.3. Describe how you define materiality and how this is captured in your research and/or rating methodology as well as final product.

          ESG Riscum Assessment (ERA) methodology has been developed by ESG Invest in order to support investors capture ESG risk and opportunities and integrate these factors into portfolio construction and management processes. ESG Invest rating methodology is conceptually sound as it is based on stringent international standards and regional strategic roadmaps and national visions across the Middle East.

ESG Invest’s ESG Riscum Assessment methodology highly values material sustainability factors that can affect operational and financial performance of companies from a risk management perspective. The methodology applied is based on the principle of materiality which combines the two following conceptual models:

Stakeholder Model: An assessment of the sustainability concerns/exposure/vulnerabilities of different stakeholders that the reasonable investor cares about and have the potential to impact corporate performance.

Shareholder Model: An assessment of the level of assurance that the company’s management (or mismanagement) of the sustainability issue will affect: i.e. profits (revenue and/or costs), assets and liabilities, and cost of capital using an ESG risk materiality perspective.

ESG data is collected and analysed using corporate and stakeholder sources:
- Public corporate documentation (ex: annual reports, corporate governance reports, sustainability reports, corporate websites, stock exchanges announcements).
Reporting in Arabic, English, and French is considered in the ESG assessments.
- Direct exchange with companies (Investor Relations and CFOs) to confirm the accuracy of the data reported.
- Stakeholders’ information (ex: Media, NGOs).
        

02.4. Additional information. [OPTIONAL]


RDP 03. Stakeholder input

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

          ESG data is collected and analysed using corporate and stakeholder sources:
- Public corporate documentation (ex: annual reports, corporate governance reports, sustainability reports, corporate websites, stock exchanges announcements).
Reporting in Arabic, English, is considered in the ESG assessments.
- Direct exchange with companies (Investor Relations and CFOs) to confirm the accuracy of the data reported.
- Stakeholders’ information (ex: Media, NGOs).
        

03.2. Additional information. [OPTIONAL]


RDP 04. Up-to-date assessment and ratings

04.1. Indicate how you ensure that your ESG assessment of companies/ sectors/ geographies or similar is up-to-date and that new information is incorporated or new assessments are conducted at reasonable intervals.

04.2. Additional information. [OPTIONAL]


RDP 05. Balanced research and assessment

05.1. Indicate how you typically ensure a balanced approach to your research methodology and assessing/rating of companies/sectors/geographies or similar. Tick all that apply and explain your approach to each option.

Type of indicators

Explain your approach

          ESG Invest covers 146 ESG KPIs including 89 qualitative indicators and 57 quantitative indicators.
        

Explain your approach

          ESG Invest methodology assesses the companies' managerial approach and measures deployed towards integrating material sustainability issues in their core business activities. It also includes quantitative performance indicators.
        

Explain your approach

          The improvement or decline in ESG performance is clearly denoted.
        

Explain your approach

          ESG Invest covers 43 ESG criteria including 16 Environmental, 26 social, and 4 governance criteria.
        

Explain your approach

          ESG Invest uses solely publicly available data to assess the performance of companies. ESG Invest engages with companies to encourage public disclosure of ESG information.
        

05.2. Additional information. [OPTIONAL]


RDP 06. Consistency and comparability

06.1. Describe the control processes in place to ensure quality of research.

          ESG Invest rating methodology and IT platform support strict application of the ESG rating model by all analysts. Our team of native Arabic speaking analysts assess information available in both English and Arabic to ensure that all available company data is captured.
Each individual ESG assessment and report is reviewed. An internal quality audit is also administered on a regular basis by the head of research to ensure respect of the ESG rating methodology and guidelines.
        

06.2. Additional information. [OPTIONAL]


RDP 07. Emerging ESG issues and trends

07.1. Indicate whether you identify and prioritise ESG issues and emerging trends.

07.2. Describe how you incorporate the identified ESG issues and trends in your product offerings and business activities.

          ESG issues are reviewed on an annual basis from a materiality perspective to include new ESG trends, opportunities, and risks. This leads to a systematic review of the ESG criteria and their weights.
        

07.3. Additional information


RDP 08. Client use of outputs

08.1. Describe how research and data provision outputs are used by clients.

Describe how research and data provision outputs are used by clients.

Our clients apply best in class ESG strategies leveraging the ESG quantitative scores and ratings that we provide for over 700 companies listed in the Middle East. They are able to identify the top performing companies as well as the bad performers in terms of percentile ESG ratings. Our clients also use our ESG reports to inform their investment decisions by identifying risks and opportunities that can impact financial performance of the companies they invest in. 

08.2. Additional information. [OPTIONAL]


RDP 09.


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