June 22, 2022, Zurich, Switzerland
Moody’s Analytics research finds a direct correlation between RepRisk ESG risk incident data and total shareholder return
# The research demonstrates the materiality of RepRisk data for financial decision-makers
Moody’s Analytics leveraged RepRisk ESG risk data for two new research studies that found companies that develop responsible ESG practices and strive to mitigate ESG risks experience fewer noteworthy ESG risk incidents and better shareholder returns.
Moody’s analyzed more than 3,000 public companies from 2013 to 2019, finding that a weak ESG risk management culture is among the top characteristics of companies that experience more ESG risk incidents. As ESG risk incidents can result in significant reputational, compliance, and financial impacts, the research evidenced that a firm’s ESG risk management policies and actions, and the ESG scores that measure them, contain financially material information for investors.
Other key findings include:
- Moderate to severe ESG events resulted in an average -4% 12-month excess equity return, which represents a loss of $292 million for a typical-sized firm in the study
- Introducing 'substantial' ESG policies will reduce the number of RepRisk incidents a $100 billion company is subject to by 18%
- 'Substantial' ESG policies will reduce the incidents and controversy numbers by 31%. The estimated reeduction is greater for large companies
RepRisk has the world’s largest database on ESG risks, powered by a consistent, transparent, and rules-based methodology that spans 18 years – the longest data time series in the industry. RepRisk’s ESG risk data is ideal for financial decision-makers who wish to leverage historical ESG risk incident data for back-testing, quantitative analysis, and portfolio construction. Moody’s research findings underscore the materiality of RepRisk data and how it can be leveraged in futurelooking financial and investment analysis and decision-making.
Learn more about the two research studies on the website of Moody’s Analytics:
About RepRisk
RepRisk is the world’s most respected Data as a Service (DaaS) company for reputational risks and responsible business conduct. From 2007, RepRisk’s data has been trusted by the world’s leading banks, investment managers, Fortune 500 companies, sovereign wealth funds, and organizations such as the OECD, UN, and the World Bank. Combining advanced AI with deep human expertise, and a proven methodology at the core, RepRisk’s solutions bring peace of mind, enabling clients to ‘know more, be sure, and act faster’. Our pioneering solutions help to strengthen due diligence processes across ESG topics, such as biodiversity, deforestation, human rights, and corruption, empowering clients to identify, monitor, and mitigate reputational, compliance, and financial risks. Headquartered in Zurich, and with offices in Toronto, New York, London, Berlin, Manila, and Tokyo, we stay close to clients and bring an independent lens to the industry. United by our shared belief in the power of data, our 400 people are proud to be setting the global standard for business conduct data and driving positive change through transparency.
Visit us at www.reprisk.com.
