Just over a year ago, S&P Global completed the acquisition of the SAM Corporate Sustainability Assessment (CSA), and the related ESG Research and Benchmarking teams transitioned to S&P Global. A lot has happened since that time, including having the S&P Global ESG Scores that are calculated from the CSA made accessible to the global capital markets. This Insight explains how the CSA is now fully integrated in S&P Global. Given this, as of today SAM CSA is renamed S&P Global CSA.
“We are proud of how quickly and efficiently we have been able to leverage the power of the CSA to further develop and enhance our extensive ESG offering.”
Evan Greenfield, Chief Operating Officer ESG, S&P Global
S&P Global CSA as the ESG Market Standard
The acquisition of the CSA further positioned S&P Global as a premier resource for ESG data, ratings, benchmarks, and insights globally. This has led to enhanced product offerings and innovations across all divisions for corporates and the capital markets. Within just 12 months of the acquisition, the CSA now forms the foundation of company ESG disclosure to S&P Global for financially material ESG factors, and underpins the firm’s extensive ESG research. This includes capabilities provided by S&P Global Ratings, S&P Dow Jones Indices, and S&P Global Market Intelligence.
Public access to ESG scores on the S&P Global website
Based on market demand for increased transparency into a company's ESG profile, all stakeholders can now search the widest coverage of ESG scores in the market, based on the CSA, on the S&P Global ESG Scores website. Publicly available are the total ESG scores as well as "E," "S" and "G" dimension scores, peer comparisons, historical changes, and scores for the nine most material ESG criteria data in each industry. These public scores serve a wide range of financial and non-financial stakeholders ranging from academia and Non-Governmental Organizations (NGOs) to customers and (future) employees that are interested in the sustainability performance of companies.
S&P Global Ratings Incorporates the CSA in its ESG Evaluation Service
In 2019, to help harmonize disparate ESG information and enable entities to better understand the ESG risks and opportunities on their horizons, S&P Global Ratings launched its ESG Evaluation: a forward-looking, long-term opinion of an entity’s ability to effectively manage future risks and opportunities. Since then, the Evaluation has continued to be refined and enhanced, including incorporating S&P Global CSA into its ESG Evaluation analysis in June 2020.
Each Evaluation comprises two inputs: the ESG Profile and Preparedness Opinion. The ESG Profile score summarizes S&P Global Ratings opinion of the current-to-near-term effectiveness of an entity’s ability to manage its risk exposure and uncover opportunities relative to peers. Companies interested in an ESG Evaluation complete the CSA as a first step. The responses provided by the CSA form the basis of S&P Global Ratings opinion of an entity’s risk management capability, bolstered by information gleaned from direct discussions between the entity and S&P Global Ratings analysts.
The Preparedness opinion is a qualitative view of an entity’s capacity to anticipate and adapt to a variety of long-term disruptions. To develop the Preparedness opinion, S&P Global Ratings analysts meet with an entity’s senior management and a board member to establish their awareness and assessment of emerging trends and potential business disruptors, as well as associated long-term planning. Both the ESG Profile and Preparedness opinion are combined to produce a relative overall ESG Evaluation score on a 100-point scale within a report which can be shared with investors and stakeholders.
S&P Dow Jones Indices Expands Its Offering Based on the CSA
S&P Dow Jones Indices has been a pioneer in ESG indexing for over 20 years, starting with the 1999 launch of the Dow Jones Sustainability World Index (DJSI World) as the first index based on the CSA results. Today, there is a full offering of S&P ESG indices that are all based on the CSA results. The S&P 500 ESG Index was the first such index for which the CME Group, a diverse derivatives marketplace, developed S&P 500 ESG futures contracts. This was a true sign that ESG and the CSA had entered the mainstream capital markets.
The Dow Jones Sustainability Indices apply a best-in-class approach, selecting companies from all industries. The S&P ESG Index Family takes a different approach that is based on the universe of the underlying index (like the S&P 500) but excludes underperforming companies or certain industries. In addition, there are thematic indices, such as the JPX/S&P CAPEX & Human Capital Index that are designed to measure the performance of Japanese companies that are proactively making investments in physical and human capital. There is also the S&P Long-Term Value Creation (LTVC) Global Index that is designed to measure stocks ranking highly in global equity markets, using both proprietary sustainability and financial quality criteria.
S&P Global Market Intelligence Releases ESG Scores to Clients
S&P Global Market Intelligence provides essential ESG data insights that go beyond traditional financial statements to help clients get ahead of emerging or underreported sustainability trends to support decision-making. As of May 2020, this has included S&P Global ESG Scores that are based on the CSA. The ESG Scores provide a robust tool to address growing market demand to integrate ESG factors into corporate investment and business strategies.
Coming soon, there will be approximately 100 Question-Level Scores for each of the 61 CSA industries accessible on Market Intelligence platforms. Questions are asked across 23 criteria, with each question having sub-questions (called data points) relevant to the topic at hand. These data points are aggregated to create Question-Level Scores, providing an additional layer of granularity and valuable insights, while keeping the underlying details confidential when the data points are not publicly available.
For the first time, financial institutions can access multiple layers of deep portfolio level insight built on S&P Global ESG Scores.
ESG Scores are available to the financial community via a range of flexible delivery options:
- Portfolio ESG Analytics assist financial institutions with assessing the ESG performance of funds, responding to increasing information requests and achieving best practice reporting standards with a pdf report. Learn more.
- Xpressfeed™, S&P Global Market Intelligence's flagship data feed solution, along with Snowflake’s Cloud Data Platform supports the growing need of asset managers to fully integrate ESG insights into their portfolio modeling. Delivery through Xpressfeed and Snowflake enables investors to bring together the Scores with over 200 other datasets, including point-in-time financials, textual data, supply chain intelligence, and more. Learn more.
- S&P Global Market Intelligence Platform combines ESG data intelligence with financial and industry data, research, and news, alongside helpful data visualization and analytical features. Learn more.
Further Integration Lies Ahead
ESG data, scores, and insights provide relevance and transparency to capital market participants. S&P Global will continue to invest and innovate in ESG capabilities to remain at the forefront of this important field. This includes further integration with S&P Global Platts, a leading provider of information, benchmark prices, and analytics for the energy and commodities markets.
It also includes aligning the corporate outreach for the CSA and the S&P Global Trucost Environmental Register, which assesses environmental performance indicators to provide a seamless way for corporations to efficiently communicate ESG performance credentials to capital markets, and help maximize rewards for sustainable business at a time of accelerating investor adoption of ESG investing criteria.