The rating model was expanded and recalibrated in accordance with the methodological developments and new features. Firstly, numerous enhancements were made in the area of financial service providers and in addition, the set of indicators was broadened. Therefore, the recurring developments in the management of sustainability impacts are considered. Furthermore, the product screening topics and the business activities were expanded. The complete revision of the parameters was essential in this process. The parameter set was expanded and recalibrated to better reflect the impact-relevant differentiation within business activities.
Development and adjustments of the rating model
- Expansion of the data pool by the introduction of additional business activities, which contributes to a more precise determination of the ESG impact;
- Update of the parameters for the differentiation within business activities with regards to the ESG impact and specificity for all sectors and thus incorporation of data developments;
- More precise determination of the ESG impact, particularly of the financial service providers;
- Sector-specific and overall expansion and adjustment of indicators, most prominently in the area of GHG emission reduction initiatives and targets to reflect the ongoing developments in reporting of the companies in this area;
- Improved alignment of the set of corporate governance indicators with the Proxy Voting for all sectors;
- Improved reflection of conflict with international conventions in the area of weapons (“controversial weapons”) in the companies’ social impact rating;
- Integration of minority interests in companies that are involved in these fossil fuels, palm oil, and pesticides.
Inrate’s ESG Impact Ratings: Model and expert-based approach
The ESG impact rating model is periodically reviewed and updated. A model-based approach enables a high degree of comparability of results across sectors and areas as well as the highest possible amount of consistency over time.
The model represents the heart of the rating process. The calculations link the analytical data and the analysis blocks – and thus the rating of the corporate social responsibility or management of the environmental and social effects of the companies – with the calculation of the environmental and social effects of the entire value chain (including Scope 3). Based on the model results, the team of analysts performs the ESG assessment. Regular updates enable adaptation to developments. The data basis is growing as a result of the continuous expansion of corporate disclosure and new studies on the environmental and social effects of economic activities. The updates are based on many years of experience and the specifics of the last rating cycle.
The basis of the Inrate ESG Impact Rating consists of the knowledge and experience of the analyst team and the systematic structure of the model and the methodology behind it.
