ISS ESG

ESG

Institutional Shareholder Services (ISS) was founded in 1985 by Robert Monks to serve institutional investors in their proxy voting and corporate governance decisions.

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Institutional Shareholder Services provides ESG ratings, climate risk data, governance analytics, and sustainability compliance tools to institutional investors, asset managers, and corporations.

Institutional Shareholder Services (ISS) was founded in 1985 by Robert Monks to serve institutional investors in their proxy voting and corporate governance decisions. The firm is headquartered in Rockville, Maryland, and now operates as a majority-owned subsidiary of Deutsche Börse Group after completing its €1.9 billion acquisition in November 2020. ISS ESG is the responsible investment and environmental, social, and governance division of the broader ISS platform, which also includes proxy advisory services and stewardship solutions under the ISS STOXX brand.

The company expanded its ESG capabilities through strategic acquisitions, including oekom AG (2018) for ESG ratings and CAER (2019) for supply-chain monitoring research. In December 2025, Deutsche Börse completed its acquisition of the remaining 20% minority stake from General Atlantic, increasing its ownership and cementing the data provider as a core European ESG infrastructure asset. ISS ESG serves global asset managers, pension funds, banks, and corporations, covering over 10,000 issuers and 300,000 funds across 180 countries with ESG ratings, climate analytics, and regulatory compliance data.

The firm operates with approximately 3,400 employees across 33 global locations in 19 countries and reported revenue of roughly $804 million. However, ISS faces mounting regulatory and political pressure: the Trump administration's January 2026 executive order targeted proxy advisers for investigation, the Federal Trade Commission opened an antitrust inquiry, and four Republican state attorneys general (Texas, Nebraska, Iowa, West Virginia) filed lawsuits alleging ISS misrepresented its methodology as objective while incorporating ESG and DEI considerations. Additionally, JPMorgan Asset Management's decision in January 2026 to abandon ISS and Glass Lewis in favor of an internal AI platform (Proxy IQ) represents a significant loss of a major customer, threatening the firm's proxy advisory market position that had historically dominated with a 48% market share.

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Who buys this

  • Global asset managers integrating ESG into portfolio analysis and proxy voting
  • Pension funds and sovereign wealth funds assessing climate transition readiness and governance risks
  • Banks and custodians reporting under SFDR and CSRD regulatory frameworks
  • Large multinational corporations benchmarking ESG performance and monitoring supply-chain labor practices
  • Institutional investors using raw ESG datapoints for custom internal assessments

Publicly disclosed clients

  • JPMorgan Asset Management (until January 2026 switch to internal Proxy IQ)
  • Deutsche Börse Group (subsidiary parent, also customer for governance data)
  • Investors in STOXX ESG indices covering 300,000+ funds

Strengths and what to watch

Strengths

  • Covers 8,200+ companies and 300,000 funds globally with structured ESG ratings, climate scenarios, and labor-compliance data
  • Owns 48% of the proxy advisory market as of 2021; serves over 4,000 institutional clients worldwide
  • Strategic European positioning under Deutsche Börse ownership, directly addressing EU sovereignty concerns in ESG data sourcing

Watch for

  • JPMorgan's departure to Proxy IQ in January 2026 signals customer defection risk; combined ISS and Glass Lewis proxy advisory market share was ~90%, now under regulatory and political attack
  • Four state attorney general lawsuits (Texas, Nebraska, Iowa, West Virginia) allege ESG methodology was misrepresented as objective; FTC antitrust investigation and Trump executive order targeting proxy advisers create existential regulatory risk
  • Data quality concerns persist: 57% of European respondents rated available ESG data as 'poor' for comparability; low correlation between competing providers suggests methodological fragmentation that could undermine client confidence

Recent moves

Key Information

Industry
ESG
Founded
1985
Headquarters
Rockville, Maryland

Frequently Asked Questions

What is ISS ESG?

ISS ESG is the responsible investment and environmental, social, and governance division of Institutional Shareholder Services. It provides ESG ratings, climate risk data, governance analytics, and sustainability compliance tools to institutional investors, asset managers, pension funds, and corporations globally, covering over 10,000 issuers.

Who owns ISS ESG?

ISS ESG is owned by Deutsche Börse Group, which acquired a majority stake in 2020 for €1.9 billion and completed the acquisition of the remaining 20% minority stake in December 2025, making it a core European ESG data infrastructure asset.

What is ISS's share of the proxy advisory market?

ISS owns approximately 48% of the proxy advisory market as of 2021 and serves over 4,000 institutional clients worldwide. The firm covers 8,200+ companies and 300,000 funds globally with structured ESG ratings, climate analytics, and labor-compliance data for asset managers and investors.

Why did JPMorgan leave ISS in 2026?

In January 2026, JPMorgan Asset Management abandoned ISS and Glass Lewis to launch proprietary Proxy IQ platform, signaling customer defection risk. ISS and Glass Lewis previously held approximately 90% of the proxy advisory market share, but the departure reflects growing regulatory pressure and concerns about methodology transparency.

What regulatory problems does ISS face?

ISS faces multiple regulatory challenges: the Trump administration issued an executive order targeting proxy advisers, the FTC opened an antitrust inquiry, and four state attorneys general (Texas, Nebraska, Iowa, West Virginia) filed lawsuits alleging ISS misrepresented its ESG methodology as objective.

Are there concerns about ESG data quality?

Yes. Research shows 57% of European respondents rated available ESG data as 'poor' for comparability. Low correlation between competing ESG providers suggests methodological fragmentation across the industry. This inconsistency could undermine institutional investor confidence in ESG assessments and their portfolio-integration decisions.

How ISS ESG compares

Direct head-to-head against 3 competitors. Picked by 7wData.

This company

ISS ESG

Positioning
Institutional Shareholder Services provides ESG ratings, climate risk data, governance analytics, and sustainability compliance tools to institutional investors, asset managers, and corporations.
Customer segments
Global asset managers integrating ESG into portfolio analysis and proxy voting
Strengths
Covers 8,200+ companies and 300,000 funds globally with structured ESG ratings, climate scenarios, and labor-compliance data
Watch for
JPMorgan's departure to Proxy IQ in January 2026 signals customer defection risk; combined ISS and Glass Lewis proxy advisory market share was ~90%, now under regulatory and political attack
Recent moves
JPMorgan Asset Management cuts ties with ISS and Glass Lewis, launching proprietary Proxy IQ platform

MSCI ESG

Positioning
ESG ratings and climate risk data provider for index-linked mandates; ratings embedded directly in benchmark and custom equity indexes.
Customer segments
Global asset managers, pension funds, and passive fund managers integrating ESG scores into portfolio construction and index products.
Strengths
ESG ratings tied directly to MSCI equity indexes, binding rating changes to passive fund rebalancing across trillions in AUM.
Watch for
ESG Ratings model version 5.0 (H1 2026) introduces widespread score changes, risking client recontracting friction and index-rebalancing disruption.
Recent moves
October 2025: announced ESG Ratings 2026 model update (version 5.0) with full indicator disclosure and supply chain risk enhancements.

Morningstar Sustainalytics

Positioning
ESG risk ratings embedded in Morningstar's fund research platform; targets asset managers using integrated sustainability and financial screening data.
Customer segments
Asset managers, fund analysts, and institutional investors using Morningstar's combined ESG risk scores and fund research for portfolio screening.
Strengths
ESG Risk Ratings distributed through Morningstar's fund research tools, reaching over 300,000 financial professionals via one integrated platform.
Watch for
Revenue declined in 2025 as Morningstar streamlined licensed-ratings products; SPO wind-down signals narrowing product scope and potential coverage gaps.
Recent moves
Q1 2025: wound down its second-party opinion business after 12 years, citing inability to scale the segment profitably.

Glass Lewis

Positioning
Second-largest proxy advisory firm; the primary operational alternative to ISS for institutional voting research and governance recommendations.
Customer segments
Institutional investors, pension funds, and asset managers needing proxy voting research independent of ISS for governance mandates.
Strengths
Approximately 40% proxy advisory market share; only full-scale institutional alternative to ISS with global corporate governance research coverage.
Watch for
October 2025 decision to eliminate uniform benchmark recommendations by 2027 dismantles its core product; transition uncertainty may accelerate client attrition.
Recent moves
October 2025: announced elimination of benchmark proxy voting recommendations starting 2027, replacing with four client-customized research report formats.

Sources

  1. en.wikipedia.org — Founding year (1985), founder (Robert Monks), acquisition history, market share (48% as of 2021), Deutsche Börse acquisition date and amount (€1.9B, November 2020)
  2. www.iss-stoxx.com — Current ISS ESG product portfolio (raw data, screening, ratings, climate analytics, regulatory solutions, engagement), customer base (asset managers, financial institutions), global coverage (8,200+ companies, 45,000 funds)
  3. www.fortune.com — JPMorgan's January 2026 departure from ISS and Glass Lewis to Proxy IQ, Jamie Dimon's public criticism, market-concentration context (90% duopoly)
  4. gsh.cib.natixis.com — Deutsche Börse acquisition context, ESG data quality concerns (57% rated 'poor'), European sovereignty concerns, customer base (4,000+ clients globally)
  5. www.esgdive.com — Four state attorney general lawsuits (Texas, Nebraska, Iowa, West Virginia), allegations of ESG methodology misrepresentation, 'Multistate Proxy Advisor Coalition' coordination
  6. www.winston.com — Trump executive order targeting proxy advisers, FTC antitrust investigation, regulatory pressure context