• New tool aids banks in estimating emissions for compliance with CSRD and EBA Pillar 3 ESG.
• Enables emission estimates for non-listed companies and SMEs.
• Follows PCAF recommendations, offering global and regional data.

ISS ESG, the sustainable investment arm of ISS STOXX, has introduced a new Industry Average Emission Intensity Data Set as part of a major augmentation to its Climate Solutions. This new tool supports banks and insurance companies in meeting mandatory climate-related disclosure requirements, including the EU’s Corporate Sustainability Reporting Directive (CSRD) and European Banking Authority (EBA) Pillar 3 ESG Disclosures. Developed in line with the EBA Pillar 3 Template 1 reporting requirements, it leverages ISS ESG’s extensive coverage and sophisticated emissions modeling techniques.

The new sector-based data set helps estimate emissions for non-listed companies, small and medium enterprises (SMEs), and alternative investments. It provides industry emission intensity averages based on NACE and GICS classifications, following PCAF recommendations. This is particularly useful for banks handling large portfolios with scarce data.

“Banks continue to face tight implementation deadlines, in tandem with data scarcity, among other challenges, to meet the regulatory requirements set out by the EBA standard,” said Till Jung, Head of ESG Business at ISS STOXX. “ISS ESG has applied its wealth of experience in measuring physical and transition-related climate risks, regulatory alignment, and much more, to develop a broad and deep dataset, to help streamline banks’ EBA Pillar 3 ESG reporting.”

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ISS ESG plans further enhancements to its Climate Solutions, catering to both mandatory and voluntary climate-related disclosures. Updates will build on the Scenario Alignment issuer-level data set, released in March 2024, and offer portfolio-level alignment metrics for up to 22 scenarios from leading models like IEA, NGFS, and UNEP OECM, including the portfolio-level Implied Temperature Rise.

This strategic move by ISS ESG aims to empower financial institutions with robust tools to navigate the complex landscape of climate-related disclosures effectively.