RepRisk
 | |
| Private | |
| Founded | 1998 |
| Headquarters | Zurich, Switzerland |
Key people | CEO, Dr. Philipp Aeby |
| Website | http://www.reprisk.com |
RepRisk AG is an environmental, social and corporate governance (ESG) research provider headquartered in Zurich, Switzerland.[1][2][3]
The company runs an online searchable database on the risk exposure of companies, projects, sectors and countries related to ESG issues.[4] It methodically assesses on a daily basis the risks, allegations, and criticism related to issues such as environmental degradation, human rights abuses and corruption that can impact an organization's reputation, financial profitability or lead to compliance issues.[2][3][5][6][7][8][9] The database is used by financial institutions and corporations as a risk research and monitoring tool.
The database includes as of November 2015 over 60,000 companies and 15,000 projects reported to have links to ESG risks.[10] The database also analyzes ESG risks related to sectors and countries. It also includes data on ESG issues and topics, over 10,000 NGOs, and over 8,000 governmental bodies.
History
RepRisk was formed in 1998 as ECOFACT, a Zurich-based environmental and social risk consultancy focused on the financial sector. In 2006, its ESG risk database was created at the request of a banking client. In 2010, RepRisk split from the consultancy and became an independent company.[10]
Methodology
Research scope and process
RepRisk screens on a daily basis about 80,000 third-party sources and external stakeholders, including print and online media, news websites, newsletters, NGOs, governmental bodies, think tanks, blogs and Twitter,[5] in 15 languages. his screening is done to identify companies and projects that have been linked to ESG-related risk events. RepRisk monitors 28 ESG issues (for example local pollution, child labor or tax evasion) and 39 topic tags, or "hot topics" (such as palm oil, Arctic drilling, indigenous people, coal, or water scarcity).[3][11][12] The research scope is defined in accordance with international standards and norms, such as the ten principles of the United Nations Global Compact (UNGC).[3]
The analysis process has five steps. After the screening of the sources, the relevant items are identified and filtered. An analyst then studies the news to define the severity and novelty of the event, and the source of the information. The relevant entities such as companies, projects, sectors, and countries, are linked to the risk event and a summary is written. After that, the news undergo a quality check. The final step is the quantification of the risk event before the data is added to the database, the RepRisk ESG Risk Platform. The quantification is done through the RepRisk Index (RRI) (see next section).[10][13]
RepRisk Index (RRI)
The RepRisk Index (RRI) is a proprietary algorithm that quantifies a company's exposure to ESG risks. The RRI does not measure reputation, but is an indicator of reputational risk related to ESG issues.
A company's RRI score can range from zero (lowest) to 100 (highest) and the higher the value of the score, the higher the risk exposure. Companies that have been exposed to higher levels of criticism in the past are less sensitive to new allegations, in comparison to a company that experiences a first-time incident. If a company does not experience new criticism, their score will eventually drop to zero over a maximum period of two years.[1][14][15]
A Current RRI value indicates the current media and stakeholder exposure of a company, project, sector or country, whereas a Peak RRI is an overall risk exposure indicator that indicates the highest level of criticism over the past two years.
The RRI score is calculated based on a number of factors, including the influence of the source of the information, the frequency and timing of criticisms, and the novelty and severity of the criticism.[1][15][16]
External use of data
- UBS was RepRisk's first client and in 2010, as part of a broader corporate responsibility initiative, UBS expanded its global compliance database to include information gathered about environmental and social risks by RepRisk. The data is applied to companies, prospective sourcing partners and investment clients to identify risks that could impact the bank's reputation and financial performance.[17][18] In 2011, UBS expanded its global compliance database to include information on environmental and social issues provided by RepRisk, a global research firm specialized in environmental, social and corporate governance (ESG) risk analytics and metrics. This was done in an effort to mitigate environmental and social risks that could impact the bank's reputation or financial performance and to simultaneously help globally standardize and systematically implement the firm's due diligence processes. RepRisk data is used in the on-boarding process to screen potential new clients and sourcing partners, alongside periodic client reviews and, also, to evaluate the risks related to transactions in investment banking and institutional lending.[19][20]
- Dow Jones Sustainability Index (DJSI) / RobecoSAM: RobecoSAM uses RepRisk as part of the Media and Stakeholder Analysis section of its Corporate Sustainability Assessment for the Dow Jones Sustainability Index, in order to identify companies' involvement in environmental, economic and social situations that may have a damaging effect on their reputation and core business.[21][22] Once a company is listed on the DJSI, it is monitored daily for any critical arising issues, which can lead to the exclusion of the company if deemed critical enough. Examples of events that would lead to exclusion include: commercial practices, human rights abuses, layoffs or worker disputes, or catastrophic disasters. This monitoring is supported by RepRisk, a global research firm and provider of environmental, social and governance (ESG) risk data. RepRisk screens media outlets, stakeholder groups and other publicly available sources to identify risks related to these issues. The information gathered is then systematically analyzed and quantified. If a critical event happens, the situation is analyzed by RobecoSAM for the scope in which it reaches. If large enough, the event will be analyzed further based on severity, media coverage, and crisis management. RobecoSAM analysts decide from here whether the company will be excluded from the DJSI. An assurance report is completed by Deloitte to ensure the validity of the company's information.[23]
- FTSE: RepRisk data is among the ESG data providers used by FTSE in their ESG methodology for various benchmarks.[24]
- The Norwegian Global Pension Fund, the world's largest sovereign wealth fund, selected RepRisk in 2009 as a key service provider to screen its portfolio for severe environmental and social risks, due to RepRisk's ability to cover an unlimited universe of companies. RepRisk was selected again in 2013.[25][26] To support the ethical screening process, the Council on Ethics works with RepRisk ESG Business Intelligence, a global research firm and provider of environmental, social and governance (ESG) risk data. RepRisk monitors the companies in the Norwegian Pension Fund's portfolio for issues such as severe human rights violations, particularly regarding child labor, forced labor, and violations of individual rights in conflict areas, as well as gross environmental degradation and corruption. RepRisk has been working with the Council on Ethics since 2009 and in 2014, re-won the tender for ESG data provision for 2014-2017.[27]
- First State Investments: RepRisk is used to screen companies in their portfolios and for company engagement.[28]
- BASF: RepRisk data is used in part to screen the suppliers of BASF for ESG-related risks.[29]
- The Sustainability Accounting Standards Board (SASB) uses RepRisk data as an input for the development of sustainability accounting standards by supporting its evidence-based research.[30]
- Carbon Disclosure Project: RepRisk's data serves as an input in the evaluation of companies for CDP's Climate Performance Leaders and Water Performance Leaders, which outlines the top companies around the world that are doing the most to combat climate change and to manage their water resources, respectively. RepRisk's data adds to the current evaluation process by validating company-provided information and clarifying how a company's policies, commitments and initiatives translate into performance.[31][32][33]
- UN-supported Principles for Responsible Investment (PRI): The RepRisk database is used by the UNPRI's Investment Engagement team to help identify ESG risks in the investment value chain and to promote engagement with companies and stakeholders.[31]
- Global 100 Ranking: RepRisk's assessment data was incorporated in the sanctions portion of the screening of the Global 100 Most Sustainable Corporations in the World annual ranking and sustainability equity index managed by Corporate Knights Capital.[34][35]
- World's Most Ethical Companies ranking: RepRisk's data is used as part of the 2015 evaluation process to validate self-reported scores provided by companies who completed the Ethics Quotient survey, the underlying framework for the World's Most Ethical Companies designation published by Ethisphere.[36][37][38]
- 2014 Newsweek Green Rankings: Newsweek incorporated RepRisk assessments of reputational risk for companies for the "Reputation Score" indicator in their 2014 Green Rankings. The Newsweek Green Rankings are one of the world's most recognized assessments of corporate environmental performance.[39]
Data products and services
RepRisk data is available in various formats and products. The ESG Risk Platform is RepRisk's online searchable database for ESG risks related to companies, projects, sectors, and countries. The database is used by financial institutions and corporations as a risk research and monitoring tool. As of November 2015, the database includes over 60,000 publicly traded and privately held companies and 15,000 projects reported to have links to ESG risks.[10] The database also analyzes ESG risks related to sectors and countries. It also includes data on ESG issues and topics, over 10,000 NGOs, and over 8,000 governmental bodies.
It is also possible to access RepRisk data via data feeds, exports of quantitative data which can be tailored and which are integrated into other systems and processes. These are used to screen and monitor large sets of data in areas such as banking, underwriting, asset management, and supply chain.
RepRisk Company Reports are PDF reports that outline the ESG and reputational risks for a single company. They are available for purchase via an online shop.
Supplier Monitoring Reports and Portfolio Monitoring Reports are also available. These are PDF reports provided on a monthly or quarterly basis that identify companies in a supplier list or investment portfolio that are most exposed to ESG risks and are most likely to violate internal policies, ethical guidelines, or international standards.
Publications and research
Annual Most Controversial Companies Report
RepRisk releases a yearly ranking of the top ten most controversial companies in the world, related to ESG issues.[40] The ranking is based on the companies that have the highest RRI over a particular year.[17][18][25][41][42][43]
| Rank | 2009[44] | 2010[45] | 2012[46] | 2013[47] | 2014[48] | 2015 |
|---|---|---|---|---|---|---|
| 1 | Peanut Corporation of America | Transocean Ltd | Tazreen Fashions Ltd | International Federation of Association Football (FIFA) | Chonghaejin Marine Company | Ruihai International Logistics Co |
| 2 | Vedanta Resources | BP PLC | Olympus Corp | Punta Fa SL (Mango) | Takata Corp | Uber Technologies Inc. |
| 3 | Newmont Mining Corporation | Vedanta Resources PLC | Lonmin PLC | Comigel SAS | Chang Guann Company | Samarco Mineração SA |
| 4 | Rio Tinto | ExxonMobil Corporation | News Corp Ltd | HSBC Holdings PLC | Zhongrong Metal Products | Takata Corp |
| 5 | Walmart | Foxconn Electronics Inc | Samsung Group | Findus Group Ltd | Uber Technologies | Blue Bell Creameries LP |
| 6 | Siemens | Chevron Group | HSBC Holdings PLC | Fonterra Co-operative Group Ltd | International Federation of Association Football (FIFA) | HSBC Private Bank (Suisse) |
| 7 | KBR | BG Group PLC | Reebok International Ltd | GlaxoSmithKline PLC | Dongguan Shinyang Electronics | Sony Corp |
| 8 | ExxonMobil Corporation | Royal Dutch Shell | ING Bank NV | BNP Paribas SA | General Motors | Volkswagen AG |
| 9 | BP PLC | Sinar Mas Group | Wyeth LLC | ICAP PLC | KT ENS Corp | Fédération Internationale de Football Association (FIFA) |
| 10 | BHP Billiton | Magyar Aluminium | TeliaSonera AB | Samsung Group | Neiman Marcus Group | 1Malaysia Development Berhad / Odebrecht SA / General Motors / Honda Motor Company |
Annual Most Controversial Projects Report
Since 2013, RepRisk releases a yearly ranking of the top ten most controversial projects in the world, related to ESG issues.[40] The ranking is based on the projects that have the highest RRI over a particular year.
| Rank | 2013 | 2014 | 2015 |
|---|---|---|---|
| 1 | Rana Plaza | Kunshan Zhongrong Metal Plating Factory | Rajput Polyester Factory |
| 2 | Pegasus Pipeline | Buenavista del Cobre Mine (Cananea Mine) | Valenzuela Slipper Factory |
| 3 | Big Gossan Mine | Soma Komur Isletmeleri Mine | Vostochnyi Spaceport (Vostochny Kosmodrom) |
| 4 | Four Rivers Refurbishment Project | Abbot Point Port Expansion | Tia Mia Gold Mining Project |
| 5 | Fukushima Daiichi Nuclear Power Plant | Mauna Ocean Resort | Angra 3 Nuclear Reactor |
| 6 | Foxconn Zhengzhou Technology Park | 2022 FIFA World Cup | Hpakant Gyi Jade Mine / Carmichael Coal Mine / Rail Project (Galilee Basin Project) |
| 7 | Gyama Polymetallic Mine | Mount Polley Mine | Ilha Pura Olympic Village |
| 8 | Mtwara Dar es Salaam Pipeline | Qingdao Port | Long Lake Oil Sands Project |
| 9 | Rustenburg Chrome Mine | Moscow Metro | Formosa Fun Coast Water Park |
| 10 | San Jose del Progreso Gold and Silver | Dan River Steam Station | Grand Mosque Expansion Project |
Additional reports
- Special Report on the Most Controversial Projects of 2015(March 2016) (link)
- Special Report on Uber Technologies Inc (February 2016) (link)
- Special Report ASEAN Series: Lower Mekong Delta – Cambodia, Laos, Thailand, and Vietnam (February 2016) (link)
- Special Report on the Most Controversial Companies of 2015 (January 2016) (link)
- Special Report ASEAN Series: Indonesia (December 2015) (link)
- Joint Special Report on Negligence (November 2015) (link)
- Joint Special Report on Privacy Issues (June 2015) (link)
- Special Report on Seabed Mining and Deep Sea Drilling (June 2015) (link)
- Special Report on ESG risks in Colombia (December 2014) (link)[49]
- Special Report on Indigenous Communities (September 2014) (link)
- Special Report on Most controversial mining (August 2014) (link)
- Special Report on MINT countries (February 2014) (link)
- Special Report on Consumer electronics (December 2013) (link)
- Special Report on Report on Arctic Drilling (June 2013) (link)
- Special Report on BRIC countries (December 2012) (link)
- Special Report on Water Scarcity (November 2011) (link)
- Special Report on Tar Sands (August 2011) (link)
- Special Report on "Fracking" (June 2011) (link)
Research
- The Effect Of Bad News On Credit Risk (Research Study): Julian Koelbel, a PhD student at the Swiss Federal Institute of Technology (ETH) in Zurich, used RepRisk data in the research study: The effect of bad news on credit risk: a media based view of the pricing of corporate social responsibility. The paper, which won an Award for Excellence in Responsible Investment Research at the UN PRI's annual Academic Network conference in 2013, highlighted that more negative news on CSR issues are associated with higher credit default swap spreads.[31]
- ESG Alpha in China (Research Study): Michael Barnett of the Centre for Corporate Reputation at Oxford University, and Jimmy Chen, Andreas Hoepner and Qian Li from the Centre for Responsible Banking & Finance at the University of St Andrews, used RepRisk data as the basis for their recent research paper, "ESG Alpha in China." The research paper, which investigated the effect of ESG risks on the share performance of Chinese firms and found that ESG criteria can be used to generate alpha for investments in Chinese companies, won the European PRI award in the category of Investment Strategy.[50]
- Kepler Cheuvreux: Kepler Cheuvreux and Affectio Mutandi included RepRisk data in their Soft Law Violation & Liability research report, one of a series of reports produced by the company surrounding business ethics.[51]
- RepRisk and CSRHub published a joint research report in May 2015 on the relationship between perceived CSR performance (based on CSRHub data) and reputational risk exposure related to ESG issues (based on RepRisk data).[52][53]
- ESG Performance of European investment funds. [54]
- The effect of bad news on reputation and shareprice: An emprical survey.[55]
Partners
- BrownFlynn
- Carbon Disclosure Project (CDP)
- Corporate Knights
- CSRHub
- Ethisphere
- GEC Risk Advisory
- Governance & Accountability (G&A) Institute
- Institutional Shareholder Services (ISS)
- The Japan Research Institute
- SASB
- UN's Principles for Responsible Investment initiative
In September 2015, it was announced that RepRisk entered into a strategic partnership with Institutional Shareholder Services (ISS) in order to serve asset managers and asset owners.[56][57]
In October 2015, it was announced that RepRisk's data had been made available for research purposes to universities through a partnership with the Wharton Research Data Services (WRDS) research platform at the Wharton School.[58][59][60]
RepRisk data is in part available through financial data distribution providers such as FactSet, Interactive Data Corporation, SIX Financial Information, and SunGard.
Awards
- RepRisk was ranked as the best Risk Analytics firm in the SRI & Corporate Governance research value chains in the 2014 IRRI Survey by WeConvene Extel (Thomson Reuters) and SRI-Connect.[61]
- In March 2013 RepRisk was awarded by the Swiss Government's Commission for Technology and Innovation (CTI) a research grant, together with the Zurich University for Applied Sciences (ZHAW), to assess and develop tools using RepRisk data that support ESG transparency in supply chain.[62]
- RepRisk received the award for ‘Most Important Innovation in Sustainability’ at the Sustainability Congress 2011 in Bonn in May 2011.[63]
References
- 1 2 3 Kelleher, Ellen (23 September 2012). "SRI funds and rivals so alike". Financial Times. Retrieved 24 July 2014.
- 1 2 "New Partnership Offers Clients of Governance & Accountability Institute Access to RepRisk Comprehensive ESG Intelligence". 3BL Media. Retrieved 10 July 2014.
- 1 2 3 4 "RepRisk AG - Corporate Profile". SRI Connect. Retrieved 12 July 2014.
- ↑ Gelles, David (2016-04-06). "Investing With a Conscience, but Done by a Robot". The New York Times. ISSN 0362-4331. Retrieved 2016-05-09.
- 1 2 Faye, Kilburn (11 March 2014). "RepRisk Preps ESG Country-Sector Risk Matrixes". Waters Technology. Waters Technology.
- ↑ "Norwegian government fund selects RepRisk for portfolio monitoring". Reputation Institute. 28 January 2014. Retrieved 28 May 2014.
- ↑ "ESG Analytics Unveils Private Equity Industry's First Comprehensive Investment Decision Support Tool". Business Wire. 26 September 2013. Retrieved 26 May 2014.
- ↑ Haederli, Alexandre (27 January 2013). "RepRisk évalue la réputation des grandes entreprises". Le Matin Dimanche. Retrieved 26 May 2014.
- ↑ Parker, Kevin (25 February 2014). "SICM's Parker: Forget the emotional arguments about sustainable investing". Fundweb. Retrieved 26 May 2014.
- 1 2 3 4 "Overview of ESG Rating Agencies" (PDF). Novethic Research. Novethic Research. Retrieved 24 July 2014.
- ↑ Adams, John (3 February 2014). "UBS Taps Big Data to Shrink Reputational Risk". American Banker.
- ↑ Avantika, Chilkoti (12 December 2012). "Brics: risky businesses". Financial Times. Retrieved 26 May 2014.
- ↑ "RepRisk Releases Annual 'Most Controversial Companies' List | Sustainable Brands". sustainablebrands.com. Retrieved 2016-05-10.
- 1 2 "Germany's AFU, RepRisk Ally for Fund ESG-risk Reports". Waters Technology. Retrieved 26 June 2014.
- ↑ Elk, Jennifer. "RepRisk releases Annual 'Most Controversial Companies' List". Sustainable Brands. Retrieved 26 May 2014.
- 1 2 "UBS turns to RepRisk for ESG data". Banking Technology. 27 January 2012.
- 1 2 Adams, John (3 February 2012). "UBS Taps Big Data to Shrink Reputational Risk". American Banker.
- ↑ "UBS turns to RepRisk for ESG data » Banking Technology". www.bankingtech.com. Retrieved 2016-02-22.
- ↑ "UBS Taps Big Data to Shrink Reputational Risk". American Banker. Retrieved 2016-02-22.
- ↑ "Dow Jones Sustainability Indices in collaboration with RobecoSAM". Sustainability Indices.
- ↑ "Measuring Intangibles: ROBECOSAM's Corporate Sustainability Assessment Methodology" (PDF). ROBECOSAM.
- ↑ "Corporate Sustainability Assessment | Sustainability Indices". www.sustainability-indices.com. Retrieved 2016-02-22.
- ↑ "Meet ... David Harris, Director ESG, FTSE". www.sri-connect.com. Retrieved 2015-12-03.
- 1 2 "Norwegian government fund selects RepRisk for portfolio monitoring". Responsible Investor. Reputation Institute.
- ↑ Ali, Saleem (22 November 2014). "Sovereign Wealth Fund Divestment as an Environmental Protection Strategy". National Geographic. Retrieved 24 November 2014.
- ↑ "RI ESG Briefing, January 28. Norwegian government fund selects RepRisk for portfolio monitoring." (PDF).
- ↑ "Meet ... Amanda McCluskey Head of Responsible Investment, Colonial First State Global AM". www.sri-connect.com. Retrieved 2015-12-03.
- ↑ "REPUTATION RISK IN SUPPLY CHAIN AT BASF" (PDF).
- ↑ "RepRisk Data Used by SASB as an Input for the Development of Sustainability Accounting Standards".
- 1 2 3 "PRI Academic Network Conference Awards recognise excellence in responsible investment research". UNPRI.org. United Nations.
- ↑ "RepRisk provides ESG risk data for review of CDP's climate performance leaders".
- ↑ "RepRisk Provides ESG Risk Data for Review of CDP's Climate Performance Leaders". Yahoo Finance. Retrieved 2015-12-03.
- ↑ "Ranking de las 100 empresas más Sostenibles del mundo". Obras Urbanas. Obras Urbanas. Retrieved 23 January 2015.
- ↑ "Global 100". Corporate Knights.
- ↑ "Ethisphere nutzt Daten von RepRisk". UnternehmerZeitung. Retrieved 2015-12-03.
- ↑ "RepRisk data to be used in Ethisphere's evaluation of the 2016 World's Most Ethical Companies". Ethisphere® Institute | Good. Smart. Business. Profit.®. Retrieved 2015-12-03.
- ↑ "swisscleantech: Inhalt". www.swisscleantech.ch. Retrieved 2015-12-03.
- ↑ "Newsweek's Green Rankings Is Back". Newsweek.
- 1 2 Medland, Dina. "The Very Human Reality Of ESG Risk Laid Bare". Forbes. Retrieved 2016-05-09.
- ↑ "Corporate Sustainability Assessment - Sustainability Indices". sustainability-indices.com.
- ↑ Grene, Sophia (5 July 2009). "Innovation key to staying ahead in ESG game". Financial Times. Retrieved 6 June 2014.
- ↑ Kelleher, Ellen, "SRI funds and rivals so alike", Financial Times, 23 September 2012
- ↑ "Most Environmentally and Socially Controversial Companies of 2009". Accountability Central. Retrieved 6 June 2014.
- ↑ "Top 10 Most Environmentally and Socially Controversial Companies of 2010". Inspired Economist. Retrieved 6 June 2014.
- ↑ Collins, Tyler. "RepRisk Releases Report on Most Controversial Companies of 2012". First Affirmative. Retrieved 26 June 2014.
- ↑ "RepRisk Releases Annual 'Most Controversial Companies'". Sustainable Brands. Retrieved 26 June 2014.
- ↑ Schiller, Ben (11 February 2015). "These Were Last Year's Most Controversial Companies". FastCoExist. Fast Company. Retrieved 11 February 2015.
- ↑ "RepRisk Special Reports". RepRisk. RepRisk. Retrieved 26 February 2015.
- ↑ ""ESG Alpha in China" research paper based on RepRisk data scoops FIR/PRI Award". RepRisk. RepRisk. Retrieved 25 February 2015.
- ↑ "Soft law violation & liability" (PDF). Kepler Cheureux.
- ↑ "Does Corporate Social Responsibility Performance Affect Reputational Risk 2015" (PDF).
- ↑ "RepRisk and CSRHub study finds link between perceived Corporate Social Responsibility (CSR) performance and reputational risk". Reuters. 2015-05-13. Retrieved 2015-12-03.
- ↑ "ESG Performance of European investment funds" (PDF). Retrieved May 10, 2016.
- ↑ "The effect of bad news on reputation and shareprice: An emprical survey." (PDF). Retrieved May 10, 2016.
- ↑ "ISS Announces Strategic Partnership with RepRisk to Offer ESG Solutions - ISS". ISS. Retrieved 2015-12-09.
- ↑ "RepRisk - ISS". ISS. Retrieved 2015-12-09.
- ↑ "WRDS adds RepRisk data".
- ↑ "RepRisk data now available to academic institutions across the world." (PDF).
- ↑ "Our Datasets".
- ↑ "The IRRI Survey 2014" (PDF). Extel, Convene and SRI Connect. Retrieved 13 March 2015.
- ↑ "CTI Project". AngelList. Retrieved 2015-12-03.
- ↑ "RepRisk awarded for "Most Important Innovation in Sustainability" at the Sustainability Congress in Bonn, Germany". RepRisk.com. Retrieved 13 March 2015.
External links
- RepRisk AG (company website)