Carbon Risk Rating
The ISS STOXX Carbon Risk Rating is a forward-looking analytical tool designed for institutional investors, asset managers, and financial analysts who need to assess corporate exposure to climate-related transition risks.
Publisher review
The ISS STOXX Carbon Risk Rating is a forward-looking analytical tool designed for institutional investors, asset managers, and financial analysts who need to assess corporate exposure to climate-related transition risks. It provides a holistic evaluation of how companies are managing the challenges and opportunities of the low-carbon transition, covering over 10,600 corporate issuers, including around 6,800 listed companies. The rating is built on two complementary pillars: a Carbon Risk Classification that measures baseline carbon exposure based on industry and business activities, and a Carbon Performance Score that evaluates the effectiveness of a company's risk management and opportunity capture. This dual structure allows investors to distinguish between inherent sector-level risk and company-specific management quality, making it a central instrument for portfolio-level carbon risk analysis and stewardship engagement.
The methodology assigns each company a score from 0 to 100, which translates into four performance categories: Climate Laggard, Medium Performer, Outperformer, and Leader. The Carbon Risk Classification evaluates emission intensity across the value chain within specific subsectors, providing a comparable baseline risk indicator. The Carbon Performance Score draws from over 100 cross-industry and industry-specific indicators—both quantitative and qualitative—sourced from ISS ESG's Corporate Rating. Key data fields include the Carbon Risk Rating, Carbon Risk Classification, Carbon Performance Score, Climate Performance Category, and a grade for GHG Reduction Targets and Action Plans. The dataset is refreshed daily and delivered via a proprietary platform or data feed, including availability on the Snowflake Marketplace.
In the competitive landscape of climate data providers, ISS STOXX's Carbon Risk Rating differentiates itself through its explicit forward-looking orientation and its integration with the broader ISS ESG ecosystem, including Norm-Based Research and SDG Solutions Assessment. Competitors such as MSCI's CarbonMetrics and Sustainalytics' Low Carbon Transition Ratings also offer transition risk scores, but ISS STOXX emphasizes a holistic approach that separates baseline risk from performance, a distinction that some investors find more actionable for engagement strategies. The rating's coverage of over 10,600 issuers is comparable to MSCI's coverage of roughly 9,000 companies, but ISS STOXX's reliance on proprietary Corporate Rating data gives it a unique qualitative depth, particularly for smaller or less transparent firms.
The primary trade-off is that pricing is only available upon request, with no public tiers or per-issuer costs, making budget comparison difficult. The tool is limited to proprietary platform or data feed delivery, lacking a self-service web dashboard for casual users. While the forward-looking methodology is a strength, it relies on management disclosures and analyst judgment, which can introduce subjectivity compared to purely backward-looking emissions data. Additionally, the rating focuses exclusively on transition risks, not physical climate risks, so investors seeking a full climate risk picture must pair it with other datasets like ISS STOXX's Water Risk Rating or physical risk models.
How it works
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Carbon Risk Classification
Assigns a baseline score reflecting a company's specific carbon exposure based on industry and business activities, evaluating emission intensity across the value chain.
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Carbon Performance Score
Forward-looking metric assessing how effectively a company manages carbon-related risks and seizes transition opportunities, using over 100 indicators from the Corporate Rating.
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0–100 Scoring Scale
Rates companies from 0 to 100 on how they deal with industry-specific climate risks, with the scale mapped to four performance categories.
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Four Performance Categories
Classifies companies as Climate Laggard, Medium Performer, Outperformer, or Leader, providing a clear, comparable framework for portfolio analysis.
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Holistic Forward-Looking Approach
Combines quantitative and qualitative indicators to evaluate transition risk exposure and management, offering a forward-looking view beyond historical emissions.
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GHG Reduction Targets Grade
Includes a specific grade for GHG Reduction Targets and Action Plans, enabling investors to assess the credibility of corporate climate commitments.
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Extensive Issuer Coverage
Covers over 10,600 corporate issuers, including around 6,800 listed companies, providing broad market representation for portfolio-level analysis.
Strengths and trade-offs
Strengths
- Covers over 10,600 corporate issuers, including around 6,800 listed companies, offering broad market representation for portfolio-level analysis.
- Uses a dual-structure approach that separates baseline carbon risk classification from management performance, enabling more nuanced engagement strategies.
- Draws from over 100 cross-industry and industry-specific indicators, both quantitative and qualitative, sourced from ISS ESG's Corporate Rating for depth.
- Provides a forward-looking view of transition risks rather than relying solely on backward-looking emissions data, aligning with TCFD recommendations.
Trade-offs
- Pricing details are not publicly available, requiring potential buyers to contact sales for a quote, which hinders budget comparison.
- Delivery is limited to a proprietary platform or data feed, with no self-service web dashboard for ad-hoc queries or casual use.
- The forward-looking methodology depends on management disclosures and analyst judgment, introducing potential subjectivity compared to purely quantitative emissions data.
- Focuses exclusively on transition risks, not physical climate risks, so investors must combine it with other datasets for a complete climate risk picture.
Pricing context
Pricing is available upon request; no public tiers or per-issuer costs are disclosed.
Getting started with Carbon Risk Rating
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Request access
Contact ISS STOXX sales to request pricing and access to the Carbon Risk Rating tool. Provide your institutional details and intended use case.
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Set up data feed
Choose between receiving data via ISS proprietary platform or direct feed integration. Configure the delivery method with your technical team.
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Map portfolio holdings
Load your portfolio holdings into the system to match against the 10,600 covered issuers. Verify coverage for your specific investments.
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Analyze carbon risk
Review Carbon Risk Classification and Performance Scores for your holdings. Filter by performance categories to identify laggards and leaders.
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Integrate into workflows
Export ratings to your portfolio management system. Set alerts for rating changes to inform engagement or rebalancing decisions.
Frequently Asked Questions
What is the ISS STOXX Carbon Risk Rating?
It is a forward-looking analytical tool for institutional investors to assess corporate exposure to climate-related transition risks. It covers over 10,600 issuers and uses a dual structure: Carbon Risk Classification and Carbon Performance Score to evaluate risk management and opportunities.
How does the Carbon Risk Rating methodology work?
The methodology assigns a score from 0 to 100, translating into four categories: Climate Laggard, Medium Performer, Outperformer, and Leader. It combines a baseline Carbon Risk Classification based on industry emissions with a Carbon Performance Score using over 100 indicators from ISS ESG's Corporate Rating.
What is the difference between Carbon Risk Classification and Carbon Performance Score?
Carbon Risk Classification measures baseline carbon exposure from industry and business activities, evaluating emission intensity across the value chain. Carbon Performance Score assesses how effectively a company manages risks and seizes transition opportunities, using both quantitative and qualitative indicators.
How does ISS STOXX Carbon Risk Rating compare to MSCI or Sustainalytics?
ISS STOXX emphasizes a holistic forward-looking approach that separates baseline risk from performance, which some investors find more actionable for engagement. It covers over 10,600 issuers, comparable to MSCI's 9,000, and relies on proprietary Corporate Rating data for qualitative depth, especially for smaller firms.
What are the strengths and weaknesses of the Carbon Risk Rating?
Strengths include broad coverage of over 10,600 issuers, a dual-structure for nuanced analysis, and forward-looking view aligned with TCFD. Weaknesses are undisclosed pricing, no self-service dashboard, reliance on management disclosures introducing subjectivity, and focus only on transition risks, not physical risks.
How can investors access the Carbon Risk Rating data?
The dataset is refreshed daily and delivered via a proprietary platform or data feed, including availability on the Snowflake Marketplace. Pricing is only available upon request with no public tiers, and there is no self-service web dashboard for casual users.
Alternatives
How Carbon Risk Rating compares
Direct head-to-head against 2 competitors. Picked by 7wData.
Carbon Risk Rating
- Pricing
- Pricing is available upon request; no public tiers or per-issuer costs are disclosed.
- Target
- The ISS STOXX Carbon Risk Rating is a forward-looking analytical tool designed for institutional investors, asset managers, and financial analysts who need to assess corporate
- Strength
- Covers over 10,600 corporate issuers, including around 6,800 listed companies, offering broad market representation for portfolio-level analysis.
- Watch for
- Pricing details are not publicly available, requiring potential buyers to contact sales for a quote, which hinders budget comparison.
BeZero Carbon
- Pricing
- Custom/Contact sales
- Target
- Carbon credit buyers, investors, and project developers
- Deployment
- Cloud/SaaS
- Strength
- Investor-grade ratings with granular risk scores
- Watch for
- Methodology criticized for lack of transparency in Carbon Market Watch report
MSCI Carbon Project Ratings
- Pricing
- Custom/Contact sales
- Target
- Institutional investors and capital markets
- Deployment
- Cloud/SaaS
- Strength
- 20+ years carbon market analysis and geospatial analytics
- Watch for
- Pricing escalation typical for MSCI enterprise data products
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Sources
Reporting on this tool draws on these publicly available sources.