Corporate Rating

The ISS STOXX Corporate Rating is a sustainability assessment tool that evaluates companies across their entire corporate value chain, assigning a Performance Scale rating from D- to A+ based on absolute best-in-class sustainability performance. Designed for institutional investors, asset managers, and financial analysts, it helps identify ESG risks, assess long-term value, meet regulatory requirements like the EU Taxonomy, and uncover new opportunities. The rating covers thousands of companies globally, focusing on those within ISS STOXX’s coverage universe, and is part of a broader suite that includes Sovereign, Fund, and Sustainability Bond Ratings.

The methodology is comprehensive and transparent, guided by established international guidelines such as the UN Global Compact and OECD Guidelines for Multinational Enterprises. It uses a twelve-point grading system from A+ (excellent performance) to D- (poor performance), with Prime Status awarded if the overall rating meets or exceeds industry-specific thresholds. The rating evaluates three key dimensions: Alignment with International Standards, Environmental and Social Impact Assessment, and Issuer’s Sustainability Strategy. Each dimension is broken down into topics and indicators, drawing on a pool of approximately 400 indicators, with an average of 150 indicators per bond for the related Sustainability Bond Rating. ISS STOXX also offers customizable scoring models that align with an investor’s specific investment approach, and provides QualityScores for deeper disclosure and governance analysis.

In the competitive ESG ratings landscape, ISS STOXX Corporate Rating competes with MSCI, Sustainalytics, Refinitiv, and S&P Global. Unlike MSCI’s AAA-CCC scale or Sustainalytics’ risk-focused approach, ISS STOXX emphasizes absolute performance on a best-in-class basis and makes its methodology publicly available, which is relatively rare among peers. Its global team of experts and holistic datasets provide rigorous analytics, but the rating’s coverage is limited to companies within ISS STOXX’s rating universe, which may exclude smaller or niche firms that competitors cover. The transparent methodology is a key differentiator, though it may not fully capture positive impacts as it primarily focuses on risks.

The honest trade-offs include that the rating is free only for companies already covered by ISS STOXX, with additional costs for non-covered firms, potentially limiting access for smaller issuers. The correlation between ESG ratings and financial performance is low, meaning high ratings do not guarantee superior returns. The rating primarily focuses on risks rather than capturing positive sustainability impacts, which may not align with impact-first investors. Additionally, while the methodology is transparent, the reliance on public disclosures and third-party data can lead to gaps in coverage for companies with limited reporting, and the twelve-point scale may compress differentiation among top performers.

Free for companies included in ISS STOXX rating coverage; paid for others, with costs varying by scope and customization needs.