IPMC ESG Scores and Ratings

Understanding IPMC Score.

The IPMC ESG Score measures a company's performance on and management of material ESG risks, opportunities, and impacts informed by a combination of company disclosures, media and stakeholder analysis, modeling approaches, and in-depth company engagement via the IPMC Corporate Sustainability Assessment (CSA). The IPMC ESG Score is a relative score measuring a company's performance on and management of ESG risks, opportunities, and impacts compared to their peers within the same industry classification.

The IPMC ESG Score uses a double materiality approach whereby a sustainability issue is material if it presents a significant impact on society or the environment and a significant impact on a company's value drivers, competitive position, and long-term shareholder value creation. The company's ESG Score is based on its responses to the Corporate Sustainability Assessment, information available in the public domain and modeling approaches.

Corporate Sustainability Assessment

All companies are assessed using the industry specific questionnaire and methodology reflecting a company's score compared to its industry peers. It focuses on four years performance on ESG issues. Companies assessed using the Corporate Sustainability Assessment fall into 2 categories:

Participating companies - ESG Score is based on the company's responses to the IPMC Corporate Sustainability Assessment, information available in the public domain and modelling approaches. Non-participating companies - ESG Score is based on information available in the public domain and modeling approaches and is not based on the company's active participation in the IPMC Corporate Sustainability Assessment.

IPMC Rating.

In contrast to ESG datasets that solely rely on publicly accessible information, IPMC ESG Scores are meticulously shaped by extensive engagement with companies through the IPMC Corporate Sustainability Assessment. Each company's ESG data points are not only cross-checked against reliable public sources but also subjected to thorough analysis. This methodology grants access to comprehensive ESG insights before they become available to others. During each assessment cycle, companies collectively invest significant time, contributing to the process, while IPMC analysts meticulously validate disclosures for accuracy and relevance. These analysts engage in discussions on methodologies and measurement best practices, offering continuous feedback.

Ranking Methodology.

Relative Ranking Methodology: This methodology involves comparing companies within a specific industry or peer group. Companies are ranked relative to their peers based on their ESG performance. This approach allows for benchmarking and comparison of companies' ESG practices within their industry and facilitates identification of leaders and laggards. The Relative Ranking Methodology: is an approach used to assess and compare entities or items based on their relative performance or characteristics within a specified set. Here's a breakdown of the methodology:Selection of Criteria: Identify the criteria that will be used for evaluation. These could be specific to the context, such as performance metrics, quality standards, or any relevant attributes.Scoring or Ranking: Assign scores or ranks to each entity based on the defined criteria. This can involve numerical scores, rankings, or categorizations. Normalization: Normalize the scores or rankings if the criteria have different scales or weightings. This ensures fair comparison by bringing all scores to a common scale. Weighting (Optional): If certain criteria are deemed more important than others, apply weights to reflect their relative significance. This gives a more nuanced evaluation, acknowledging the varying importance of different factors.Calculation of Overall Score: Combine the scores or rankings based on the criteria to derive an overall score or rank for each entity. This provides a comprehensive view of performance.Interpretation: Interpret the results to understand the relative positions of the entities. This could involve identifying the top performers, those needing improvement, or making distinctions between different groups.Feedback and Improvement: Provide feedback to the entities being ranked, offering insights into areas of strength and opportunities for improvement. This step encourages a continuous improvement mindset. Iterative Process: The ranking process can be iterative, allowing for adjustments in criteria, scoring, or weighting based on feedback or changes in the evaluation context. This methodology is applicable in various fields, including business performance assessments, project evaluations, academic rankings, and more. Its flexibility makes it adaptable to different scenarios where a comparative analysis is needed.               Click here to read more