Impax Systematic ESG Rating

The Impax Systematic ESG Rating, previously the Impax Sustainability Score, is a proprietary ranking of companies’ environmental, social and governance (ESG) performance developed by Impax’s Sustainability Research Team. The rating framework is shaped by the team’s collective experience and insights on how sustainability impacts financial performance.

Companies in the Russell 10001 Index are rated on a scale from 0-10 (10 is best). The rating is designed to capture material information regarding a company’s risk and performance potential.

Process Overview

Impax’s rating framework takes into consideration 72 ESG performance and risk indicators from third-party research providers in addition to original Impax research, including custom gender leadership and carbon intensity ratings.

The team assesses key ESG issues for each sector, industry and sub-industry and weights ESG variables accordingly.

  • How exposed is the company to material ESG risks?
  • How can the company take advantage of ESG opportunities?

Overall, the rating emphasizes a company’s management of ESG-related risks. Further, the rating adjusts for significant ESG-related controversies and whether a company’s ESG performance is improving or regressing.

Not all ESG analysis is created equal

Similar to financial ratings, ESG ratings can vary widely depending on the research provider. Analysis is complex and numbers alone don’t tell the whole story.

The rating is a reflection of Impax’s decades of sustainable investing experience. This perspective has allowed us to build a robust process for evaluating how companies are meeting ESG challenges and opportunities.

1 The Russell 1000 Index measures the performance of the 1,000 largest US companies, as measured by market capitalization.

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