Clarity ESG Risk Score allows investors to assess how well the companies and countries in a given portfolio are managing their Environmental, Social and Governance related risks and opportunities.
First, Clarity measures the degree to which individual organizations (companies and/or countries) in the portfolio face financial risks from ESG issues, then they roll the individual scores up into an overall, portfolio-level score - factor-weighted by assets and materiality. The score is easy to interpret: a score of 100 means the overall portfolio has negligible ESG risk; 1 means it is exposed to significant ESG risk.
The score allows investors to:
- Compare portfolios across categories and relative to benchmarks
- Serve as an initial screen for investors interested in sustainability and ESG factors
- Determine both the level of sustainability in their existing portfolios and allow them to set sustainability targets