Our ESG data providers Combining our research capabilities with recognized external data providers: MSCI ESG Research, EthiFinance and Carbon4 Finance We rely on research and ESG ratings established by MSCI ESG Research, which rates companies on a CCC to AAA scale (with AAA being the best rating). MSCI ESG Research’s rating philosophy is based on ESG-issues materiality . Ratings are assigned on a sector-by-sector basis via a “best-in-class” approach which favors the highest ESG rated companies within their sector of activity, without privileging or excluding any sector.
MSCI rating correspondence table:
Rating letters
Final industry score / 10
AAA
8.6 – 10.0
AA
7.1 – 8.6
A
5.7 – 7.1
BBB
4.3 – 5.7
BB
2.9 – 4.3
B
1.4 – 2.9
CCC
0.0 – 1.4
MSCI ESG Research uses public data provided by governments, NGOs, academic institutions or directly from company disclosures. To summarize, for each key ESG challenge identified per sector (between three and eight, depending on the industry): ■ MSCI ESG Research assesses a company exposure to potential risk (based on its business model, its presence in certain countries, etc.) and the policies and actions implemented to oversee it ■ Similarly, if MSCI ESG Research considers it as a sector opportunity, it evaluates the company exposure to the opportunity and the initiatives that have been taken to address it. In their rating process, MSCI ESG Research analysts integrate any controversies to which issuers are exposed. The ESG ratings are reviewed at least annually and may be revised on an ad hoc basis to integrate a new controversy. The MSCI ESG Research ratings allow us to sort and steer our investment universe transparently. In case of major corporate events, likely to materially alter the issuer’s ESG rating and the delay the MSCI ESG Research updates, a provisional in-house rating may be assigned during the adjustment period. We have upgraded our ESG data architecture with two additional data providers: ■ EthiFinance, providing ESG ratings on request and helping optimise ESG coverage of portfolios ■ Carbon4 Finance, which offers a set of carbon data, in-depth temperature profiles, as well as biodiversity footprint data In addition to the quantitative information of our data providers, we also use external research: ■ Brokers studies (JPMorgan, Exane, Goldman Sachs, Barclays, Morgan Stanley, Oddo, etc.) ■ Academic, scientific or supranational institution research, NGO reports and free-access databases (SBTi, TPI or CDP)
(1) Although Rothschild & Co Asset Management Europe information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the “ESG Parties”), obtain information (the "Information") from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness of any data herein and expressly disclaim all express or implied warranties, including those of merchantability and fitness for a particular purpose. The Information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis, or a component of, any financial instruments or products or indices. Further, none of the Information can in and of itself be used to determine which securities to buy or sell or when to buy or sell them. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein, or any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
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ESG policy | Rothschild & Co Asset Management Europe
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