Elaine
What are the two types of analyses to integrate ESG?
qualitative, quantitative
What was Russia scored on the FSS?
-4
What is the range of ESG factor scores
0-5
What is the full form of CRA?
credit risk assessment
Name a key consideration when choosing ESG data for investing
Number of companies covered
Length of dataset history
Languages used (code)
Stability of methodology
Range of datasets
Regularity of updates
Name one of the different aims and objectives for integrating ESG into an investment process
Meeting requirements under fiduciary duty, Meeting client and beneficiary demands, Lowering investment risk, Increasing investment returns, Giving professionals more tools and techniques to use in analysis, Improving the quality of engagement and stewardship activities, Lowering reputational risk at a firm level and investment level
What are two of the main issues with ESG data availability and/or quality?
disclosure challenges, no universal rating technique, lack of colinearity between ratings, integration challenges, no audits
Who provides ESG scores
ESG rating agencies
Name the fixed-income instrument tied to projects that create an environmental benefit.
green bonds
When was PRI’s statement on ESG credit risk and rating as well as its report on the CRA released?
2020
What does API stand for?
Application Programming Interface
Name 3 criticisms for ESG integration (specifically from the ones covered in the textbook
Too inclusive of poor companies , Dubious assessment criteria , Quality of data is not where it should be , Potential lack of emphasis on long-term improvements
What are the two types of Material ESG risk
Unmanageable risk and management gap
Name a leader in ESG assessment and Rating?
MSCI or MorningStar
What are ESG scores evaluated against?
The benchmark
This is typically included in the research state to identify ESG issues that are likely to have an impact on the company’s financial performance
materiality assessment
Name the three types of data providers in the ESG space
large for-profit, boutique for-profit, nonprofit
What is a materiality map
Identifies likely material sustainability issues on an industry-by-industry basis
What do certain fixed-income investors use in their fixed income assessments?
quantitative ESG scores (QESGs)
What percentage of equity investors do not integrate ESG processes?
24%
What percentage of alternative asset investors do not integrate ESG into their processes? (hint: it's a range)
72-92%
Name four types of ESG advisory products and/or services
ESG Data , ESG Ratings , ESG Screening ,Voting and governance advice , ESG benchmarks and indexes , ESG news and controversy alerts , Integrated research ,Advisory services (Eg., UN SDGs)
What is one factor that influences a company's level of ESG disclosure
Disclosure varies based on geography, company size and industry practice
What kind of credit risk affects a specific bond issue and not the whole market?
Issuer and company level risks
What type of indicator is it called when securities with high ESG risk are flagged and investigated further or excluded?
red flag indicators