ACRA publishes draft methodology for ESG assessment

ACRA has published a draft of its methodology for ESG assessment (E - environmental, S - social, G - governance). The document is available on ACRA’s website and is open to comments from market participants (https://www.acra-ratings.ru/criteria/2042).  

The draft methodology presents ACRA’s approach to ESG assessment, which consists of the blocks listed below:

  • E represents the environmental impact assessment, which evaluates the performance indicators of the entity in terms of environmental impact.
  • S represents the social responsibility assessment, which evaluates the performance indicators of the entity in terms of social responsibility.
  • G represents the governance quality assessment, which evaluates the performance indicators of the entity in terms of governance.

ACRA’s approach is based on analyzing a wide range of ESG data with a significant focus on quantitative indicators. ACRA also takes into account approaches to understanding the sustainable development of society reflected in the UN document “Sustainable Development Goals”1. In addition to evaluating actual achieved indicators, the Methodology assesses actions to minimize the risks of environmental accidents, social tensions, and corporate governance risks. This makes ACRA’s assessments useful in determining the probability of relevant risks materializing, as well as assessing the impact on the financial performance of the assessed entities in terms of eliminating and compensating for their consequences.

The Methodology is applicable to financial and non-financial companies, as well as sovereign and sub-sovereign entities. In addition, the Methodology can be used to evaluate individual portfolios of management companies (mutual funds, closed-end investment funds, etc.).

The draft Methodology is open to discussion. ACRA encourages all interested parties to submit their comments and suggestions in writing to methodologyGBR@acra-ratings.ru by September 25, 2020. ACRA will consider all suggestions before the final version is approved by the Methodological Committee.

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