Principle 1 (Securing Quality):
Ensure the quality of ESG evaluation and data - The basic procedures necessary for this purpose should be established.
Sustainable1 has established procedures to ensure that its data analysis is thorough, and its methodologies are both consistently applied and regularly reviewed (Guidelines 1, 2 and 3). Sustainable1 adopts a multi layered approach to measure and optimize the quality of its ESG data as utilized in the creation of S&P Global ESG Scores (“Score Data”). This comprises data quality checking by analysts in several stages depending on data materiality and whether it is sourced through direct company engagement or from public records. Certain datasets will undergo two-stage quality checking in addition to further sample-checking. Also, an independent sampling team has been established to run a sampling program which randomly selects companies every month for audit, identifies errors and generates a health scorecard. This team focuses its efforts on fields that are deemed critical to quality according to pre-defined logic. Sustainable1 also regularly re-evaluates its quality processes and adjusts them in the light of findings and root cause analyses (P1, Guideline 1).
To ensure quality and objectivity of Score Data, Sustainable1 voluntarily appoints an independent third-party to conduct an external audit of the assessment process each year. The targeted Assurance statement can be found here (P1, Guideline 1).
Sustainable1 is undertaking several key initiatives to further support the creation of high quality Score Data including the introduction of new processes and systems to modify and centralize data collection and the expansion of audits to verify and enhance existing data validation and error checking systems. It is also increasing investments in automation and Machine Learning (ML) which will contribute to minimizing manual intervention, hence leading to an overall improvement of data quality (P1, Guideline 1) .
Further, Sustainable1 is in the process of formalizing the Analytic Risk and Quality (ARQ) group which will be responsible for performing independent (i) validations of the underlying methodologies and models for S&P Global ESG Scores, and (ii) periodic reviews of the S&P Global ESG Scores methodologies, models and application of the methodologies (P1, Guideline 3).