ISS ESG Provides Climate-Related Data and Reporting Under Eurosystem Central Banks Framework Agreement

NEW YORK (March 9, 2022) —ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc. (ISS), today announced it has won a tender relating to the supply, usage and disclosure of climate-related data under a framework agreement developed by the Eurosystem Central Banks. Deutsche Bundesbank, which acted as Lead Central Bank for the procurement process, entered into a contract with ISS, announced today. All other European System Central Banks have the opportunity to join this framework agreement for regulatory tasks and activities being necessary for the performance of their missions and responsibilities. In particular, ISS supplies the Eurosystem with the data and information it requires to implement its common stance for applying climate-related sustainable investment principles in euro-denominated non-monetary policy portfolios (NMPPs).

By way of background, last year, the Eurosystem Central Banks – 19 national central banks of the euro area countries and the European Central Bank (ECB) defined their common stance for applying climate-related sustainable investment principles in euro-denominated NMPPs, that they each manage under their own responsibility. Within the agreed common stance, all Eurosystem members aim to start climate-related disclosures for the NMPPs in Q1 2023, including the measurement and disclosure of greenhouse gas (GHG) emissions, using the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) as the initial minimum framework and reporting, in the category of metrics and targets.

Of note, in January 2022, the ECB launched a supervisory climate risk stress test to assess how prepared banks are for dealing with financial and economic shocks stemming from climate risk, comprising three distinct modules – a questionnaire on banks’ climate stress test capabilities; a peer benchmark analysis to assess the sustainability of banks’ business models and their exposure to emission-intensive companies; and a bottom-up stress test.

ISS ESG has built data, analytics, reporting and advisory capabilities to help banks navigate these climate-specific ECB stress testing requirements, providing support to banks’ risk management teams on ECB climate guidelines. It offers the high-quality climate data and analytics needed to fulfil the new ECB requirements, such as the calculation of climate metrics for relevant counterparties in the second module, and support on the ECB third module bottom-up stress testing projections, targeting transition and physical risk.

About ISS ESG
ISS ESG solutions enable investors to develop and integrate responsible investing policies and practices, engage on responsible investment issues, and monitor portfolio company practices through screening solutions. It also provides climate data, analytics, and advisory services to help financial market participants understand, measure, and act on climate-related risks across all asset classes. In addition, ESG solutions cover corporate and country ESG research and ratings enabling its clients to identify material social and environmental risks and opportunities. For more information, please visit us at: www.iss-esg.com