ISS’ Consolidated Response to Global Codes of Conduct for ESG Ratings and Data Product Providers
Below are key takeaways from ISS’ recently released consolidated adherence statement in response to Global Codes of Conduct for ESG Ratings and Data Products Providers.
ISS is pleased to publish this adherence statement in connection with the International Organization of Securities Commissions’ (“IOSCO”) RecommendationsRecommendations for Environmental, Social and Governance (ESG) Ratings and Data Products Providers. The statement addresses the application of the recommendations to relevant research offerings produced by ISS ESG, the sustainable investment arm of ISS, with a focus on the processes established by the ESG Research team.
ISS’ statement addresses the endorsement/application of the following Codes of Conduct as they are closely aligned with the IOSCO Recommendations, and apply to the ESG ratings and data products and international market set out in the Recommendations:
JapanJapan: the Financial Services Agency of Japan’s (“FSA” or “JFSA”) Code of Conduct for ESG Evaluation and Data Providers – December 2022 (the “JFSA Code”) which applies to ESG evaluation and data products and leverages the IOSCO Recommendations
SingaporeSingapore: the Singapore Code of Conduct for ESG Rating and Data Product Providers – December 2023 (the “MAS Code”), developed by the Monetary Authority of Singapore, which applies to ESG ratings and data products and leverages IOSCO’s recommendationsrecommendations for good sustainable finance practices
UKUK: the International Capital Markets Association’s Code of Conduct for ESG Ratings and Data Products Providers – December 2023 (the “ICMA UK Code”), commissioned by the Financial Conduct Authority (FCA), which applies to ESG ratings and data products and leverages the IOSCO Recommendations
Hong KongHong Kong: the Hong Kong Code of Conduct for ESG Ratings and Data Products Providers – October 2024, (the “ICMA HK Code”), sponsored by the Hong Kong Securities and Futures Commission (SFC), which applies to ESG ratings and data products and leverages the IOSCO Recommendations
We have reviewed the IOSCO Recommendations, as well as these aligned Global Codes of Conduct, and believe they are consistent with our own abiding commitment to carry out our duties in the best interest of our clients.
ISS’ consolidated statement, mirrors the structure of the Global Codes and IOSCO Recommendations, describing how ISS applies each of the principles and related guidelines as they fit the policies and practices of ISS at the organizational level, and, as relevant, ISS ESG ratings and data products. These policies, in combination with ISS ESG quality assurance processes, are designed to foster objectivity and transparency in ISS ESG research reports and provide investors with reliable and useful information.
The statement also details how ISS provides transparency into ISS ESG research offerings to our clients, the rated entities, and the public. It includes methodology documentation related to ISS ESG’s ratings and data products. Lastly, the ISS Due DiligenceISS Due Diligence package also addresses the identification and management of conflicts of interest.
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