For those of you unfamiliar with EIRIS, we are an independent non for profit organisation specializing in environmental, social and governance research on publicly listed companies. We were founded over 26 years ago by a group of churches and charities who were concerned in the early 80s about their investments and whether they were inadvertently supporting the apartheid era regime in South Africa. We have offices in London, Paris and Boston and work with a network of regional partners including organisations in South Korea and Australia. We research over 3,000 co’s globally. Our research covers over 300 research points – covering the spectrum of environmental, social and governance issues. Over 100 publicly listed clients – these include asset owners, managers, charities, religious organisations, high net worth individuals stock exchanges and index providers Our aim is to provide investors with a suite of resources to implement their own responsible investment strategies. During the last 25 years we have seen investor interest and Company reporting on ESG issues have grown exponentially. We have seen RI shift from being a small niche field concerned purely with negative screening towards the mainstreaming of RI and investors actively engaging with companies.
The Climate Change Impact assessment is combined with the assessment of Management Response to provide an overall Carbon Risk Factor score for each company. Carbon Risk is measured on a scale of zero to 100, where the mid-point, 50 identifies companies that have adequate risk management systems in place. The overall figure seeks to assess the average risk of each company. The premise is that “solution companies” such as pure play, alternative energy firms will provide the lowest risks as their products are designed to reduce or replace typical carbon intensive products. They will by clustered at the top of the scale, scoring between 80 and 100 points. Energy- intensive companies with little of no evidence of a strategy for managing their climate change impacts will obtain the lowest scores on the scale. The range of possible scores will vary depending on the impact classification of each company – Very high impact companies have the largest range of possible scores – from 0 to 75 reflecting the greater risks and opportunities facing companies with very energy intensive activities.
Ratings And The Long-Term Investor - The Case Of Climate Change