If yes, describe how you typically incorporate E, S, and G factors into the reporting.
Our reporting solution "ESGRA" is the first of its kind in the custodian industry, offering our institutional clients the ability to measure and monitor the exposures to ESG factors in their portfolios and benchmarks at multiple levels. ESGRA is an interactive and online solution. ESGRA incorporates metrics on key themes within the three pillars, including:
1. Environmental: resource reduction, emission reduction and product innovation
2. Social: employment quality, health & safety, training & development, diversity & opportunity, community, product responsibility and human rights
3. Governance: board structure, compensation policy, board functions, shareholder rights, vision & strategy
ESGRA supports clients in their ability to monitor their ESG risks and exposures through:
- Multi-level ESG scoring using two key datasets ("Multi-level ESG scoring using partnered data providers): investors are able to analyse their ESG exposures and risks at a company level and to aggregate from a company level to analyse ESG risks across a portfolio (and benchmarks as appropriate).
- Business Involvement (BI) looks at whether a company derives a proportion of its revenues from certain potentially sensitive activities (such as alcohol, tobacco / gaming). Typically two thresholds are studied - absolute (yes or no) or 5% of revenues.
- Controversies are flags raised in response to a company’s reputation in the public arena / media, in respect of key ESG issues. Examples include: shareholder rights, community issues, human rights, environmental issues and labour rights. Controversies are a useful level of analysis because they forewarn investors of issues impacting the investee company and that may therefore impact the company’s profit, and ultimately, shareholder value).
- Climate-related risks include carbon footprint metrics like carbon footprint, carbon emissions sales intensity and exposure to carbon intense companies, it gives the investors the amount of carbon their investments are responsible for, allowing them to monitor it and set targets. Real life benchmarks allow to compare these metrics to real life indicators like the equivalent emissions of French households, Paris-New-York round trip by plane and others.