Northern Trust Launches ESG Ratings

Northern Trust Asset Management introduced the Northern Trust ESG Vector ScoreTM, a measurement that assesses publicly traded companies in the context of financially relevant environmental, social and governance (ESG) related criteria that could impact their operating performance. It can be used in constructing and managing investment portfolios and stewardship activities. The ESG Vector Score focuses on the magnitude and direction of key ESG related business issues likely to have a financial impact on companies and hence a portfolio’s performance. It provides a consistent, transparent methodology to gain greater clarity when building and managing sustainable portfolios. NTAM’s approach marries two leading sustainability disclosure standards and frameworks – the Sustainability Accounting Standards Board’s (SASB) Standards, which are industry-specific sustainability disclosure standards focused on financial materiality, and the thematic structure of the Task Force on Climate-related Financial Disclosures’ (TCFD) Recommendations. The design enables more purposeful and transparent integration of ESG considerations into investment processes, addressing the need for a consistent way to measure and report on ESG investments.