. This measure is sourced from roughly 60,000 news sources to determine whether there might be financially material impacts from 10 ESG-related topics, including: business ethics, society and community, operations, environmental supply chain, product and service, employee relations, social supply chain, customers, corporate governance and public policy.
News is assessed based on the negative environmental and/or social impact of the company activity as well as the reputational risk that the activity poses to the company. The controversy measure ranges from one to five . A score of five would represent exceptionally egregious corporate behaviour, high frequency of recurrence, very poor management of ESG risks and a demonstrated lack of willingness by the company to address relevant risks.
Today’s strategy screens for companies with low controversy levels alongside traditional financial metrics including:Five-year deviation of return on equity and EPS ;To qualify, stocks must have a market capitalization great than $580-million, a figure representing the median stock in the universe database .