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ESG Risk Score FAQs
ESG Risk Score FAQs

Get answers to frequently asked questions about IBISWorld’s ESG Risk Scores and assessments.

Updated over a week ago

This article covers common questions related to UK and Australia ESG Risk Scores. For additional information on our German-language product, read our article on ESG Ratings for Germany.

What is an ESG Risk Score?

Our ESG risk scores are evidence-based scores that measure an industry’s performance across the three main categories: environmental, social and governance. Scores are presented on a scale of 1 to 9, with 1 indicating the lowest level of risk related to possible compliance issues and litigation claims, detriments to society, and defamation of public image, among other factors. When industries score high on the scale, these issues are considered severe enough to pose negative financial impacts.

What products can I find ESG risk scores in?

ESG risk scores are available in a few different products that vary slightly by region:

  • ESG Ratings for Germany

  • ESG Risk Assessments for Australia

  • ESG Risk Reports for the United Kingdom

Despite having slightly different names, each product consists of a report-style overview that delves into the ESG landscape and provides context behind each industry’s score.

Each of these products also includes an ESG Risk Scores Listing that can be downloaded and sorted for easy identification of the most- or least-risky industries.

How do I access IBISWorld’s ESG risk products?

Depending on your research needs, you can either start by accessing the ESG Risk Scores Listing or you can navigate more directly to a report or assessment by starting in an Industry Report.

If your goal is to identify high-to-low-risk industries for targeting, you can start with the ESG Risk Scores Listing, which is located under “Products” in the navigation menu. You can click on an industry in the list to access the associated ESG report or assessment.

The ESG Risk Scores Listing product under Supplementary Products in the Products section of the platform navigation menu.

If you already know which industry you need ESG insights for, then you can access an ESG report or assessment from the Related Industry Products section in the Industry Report.

For UK users, selecting “ESG Risk Scores” will open the associated ESG Risk Report. Australian users can navigate to a similar type of report by clicking on “ESG Risk Assessment.”

The Australia ESG Risk Assessment and UK ESG Risk Scores in the Related Industry Products section of the left-hand navigation menu in an industry report.

You can find instructions for accessing Germany’s ESG risk products in the ESG Ratings for Germany article.

What download options does IBISWorld offer?  

You can download the ESG risk reports and assessments as PDF or Word documents. The ESG Risk Score Listings are available to download as Excel files.

How are IBISWorld’s ESG risk scores calculated?

Our scores are derived from a combination of quantitative data and qualitative research. Our analysts assess nearly 30 variables that are grouped into 15 main factors. The 15 factors are then averaged to produce an overall score. Details on score weightings can be found in the Australia and United Kingdom methodology papers. You can refer to the ESG Ratings for Germany article to learn more about German methodology.

Factors included in ESG Risk Scores

All ESG risk scores

  • Commitment to Environmental Initiatives

  • Energy Efficiency

  • Greenhouse Gas Emissions

  • Waste Management

  • Water Efficiency

  • Fair Labour Standards

  • Leave Benefits

  • Pay Equality

  • Workforce Composition

  • Regulatory Complexity

  • Tax Corruption

Australia ESG risk scores

  • Trade with Risky Geopolitical Regions

  • Modern Slavery

  • Fines, Penalties and Enforceability

  • First Nations Participation

UK ESG risk scores

  • High-Risk Geographies

  • Anti-Corruption Mechanisms

  • Involvement in Controversy

  • Lobbying Presence

How did IBISWorld decide which factors to include in its ESG risk scores?

When selecting the 15 factors used in our scoring, our research team focused on the issues most relevant to all industries and most mentioned in legislation. Our team also sought out factors that align with disclosure recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD) to ensure that the scores would be relevant and actionable to clients in procurement, consulting, banking, accounting and beyond.

What are the key data sources used for ESG risk scores? 

We source quantitative data for ESG risk products from government agencies and Transparency International. Government data sources vary depending on geography. You can find a complete list of sources by downloading the Australia or United Kingdom methodology paper.

We conduct qualitative research using company annual reports, industry associations, industry regulatory bodies and unbiased news articles.

Why are ESG risk scores valued on a scale of 1-9?

Our scores use the same numeric scale found in our Risk Ratings Reports to allow for streamlined use of our full suite of risk products. When developing score-driven products, we emphasise numeric ratings because they are easiest to integrate with our clients’ existing scoring practices and risk modelling frameworks. We consider numeric scoring to be more intuitive than, for example, an alphabetical scale that is difficult to translate into numerals.

Does IBISWorld provide company ESG risk data?

Our Australia ESG Risk Assessments include a dedicated section for company analysis. The section is designed to spotlight the top ESG issues for major companies in an industry and report on how the companies have responded. Numeric scores are not currently part of this analysis. Furthermore, the UK ESG product does not cover company analysis or scoring at this time.

How does IBISWorld’s ESG coverage compare to similar information on the market?

Our ESG risk products fill a gap in the market by focusing on industry data first, and company information second. All scores reflect industry-based risks across the ESG landscape, thus avoiding company bias. Other ESG products provide company ESG scores or analyse a collection of company scores (oftentimes from their own client pool) to identify trends that apply to an industry. We start at the industry level, using unbiased survey data and government reporting to calculate a more comprehensive score that is not weighted by leaders or laggards within the industry.

Can I use IBISWorld's ESG products to assess Scope 1,2, and 3 greenhouse gas emissions?

Yes. There are three main factors that correspond with Scope 1, 2 and 3 emissions, which are quantified in the Greenhouse Gas Emissions, Energy Efficiency and Waste Management scores, respectively.

The Environmental Scores for each factor in the Environmental Issues section.

Scope 1

The Greenhouse Gas Emissions score can be used to assess Scope 1 emissions because it measures the emissions produced by companies within the industry. A high Greenhouse Gas Emissions score is correlated with high Scope 1 emissions.

Scope 2

The Energy Efficiency score can be used to assess Scope 2 emissions because it indicates the level of emissions produced by companies’ energy sources. A high Energy Efficiency score indicates higher Scope 2 emissions.

The Australia ESG Risk Assessments provide additional insight into Scope 2 emissions through the Company ESG Assessments and Climate-Related Risks and Opportunities sections. These sections may report on the industry’s prioritisation of green energy solutions or individual companies’ responses to energy efficiency challenges.

Scope 3

The Waste Management score can be used as a proxy to assess Scope 3 emissions, which include emissions from assets not owned or controlled by a company, but that the company indirectly affects in its value chain. The Waste Management score is not an all-encompassing measure of Scope 3 emissions but does help to quantify one piece of the puzzle. Scope 3 emissions are particularly difficult to measure as reporting standards have historically been unclear. Once more stringent reporting standards are in place and more data becomes available, we will be able to provide insight into other factors that contribute to Scope 3 emissions.

Outside of the scorecard factors, users can refer to the ESG Risk Across the Supply Chain section of the ESG Risk Score Overview chapter. This section provides transparency into ESG risk in upstream and downstream industries, helping to quantify the potential impacts from indirect sources of risk across the value chain.

How timely is IBISWorld’s ESG coverage?

Because we use a variety of survey data and government sources to calculate ESG risk scores, the timeliness of information varies but will always reflect the most recent data available at the time of update. Our analysts update the ESG Risk Assessments each time they update the associated Industry Report, which happens 1-4 times per year.

How can I purchase IBISWorld’s ESG risk products?

The ESG risk products covered in this article can be added to any membership that includes either UK SIC, UK Specialized or Australian ANZSIC Industry Reports. For German-language ESG Risk Ratings, our WZ Industry Reports are a prerequisite to adding any Germany ESG risk products.

For additional questions regarding our ESG risk products, please contact your Client Relationship Manager. If you don’t have an IBISWorld account, contact us to learn more about our membership options.

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