How we rate the impact of companies and make sure we only invest in solution providers.
How we measure the impact of companies and identify impact solution providers.
First things first: Be aware that a rating is always an abstraction of reality and has its limitations - see the document "SDG Impact Rating Guiding Principles" at the bottom of the page for more details.
Companies are embedded in society, nature and the economy and therefore always have an impact on them.
We use the UN Sustainable Development Goals (SDGs) as a framework for measuring impact. The SDGs have been adopted by all UN member states. They cover all of today's major challenges and are a roadmap for future development.
To assess the impact on the SDGs, we focus on a company’s products & services and its operations. What a company produces is by far the most important factor for its impact. But the way it does business cannot be ignored either and can be very relevant for certain SDGs (SDG 5, 8 and 9). The impact of the supply chain, use of profits and communication are partly taken into account by adverse media monitoring (controversies).
With these factors we calculate a score for each of the SDGs, ranging from -100 to +100:
+100 to +60: high positive impact
+60 to +20: positive impact
+20 to -20: neutral
-20 to -60: negative impact
-60 to -100: high negative impact
If a company has a relevant impact on an SDG, it receives the respective positive or negative SDG flag.
We then combine the SDG profile into an Overall (net) SDG Score, ranging again from -100 to +100. Hereby, extreme values (both positive and negative) are overweighted.
We consider companies with a score above 20 as having a net positive impact.
As a control, we also apply strict exclusion criteria from our comprehensive exclusion list.
We only invest in companies with an Overall SDG Score above 20, at least one positive SDG flag and no exclusion flag.
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