China Securities Index Company Releases ESG Rating Methodology

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  • China Securities Index Company Releases ESG Rating Methodology

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    China Securities Index Co., Ltd. officially released its ESG rating methodology, as reported by Shanghai Securities News on December 3, 2020. The rating system is composed of three dimensions and covers 14 themes, 22 categories and over 100 raw data points. The sources for the ratings mainly come from listed companies’ annual and CSR reports, various relevant information released by government agencies and news media. The scores are calculated starting from the raw data points, categories, themes, and dimension in turn. The dimension scores are divided into 10 grades from high to low. They are AAA, AA, A, BBB, BB, B, CCC, CC, C and D. Higher grades represents better ESG performance.

    The rating methodology has three characteristics: first, it takes into account international practices such as UN-PRI’s guidelines as well as local practices such as poverty alleviation; second, it includes a series of quantitative indicators such as green income and social contribution value per share; third, it concentrates on both risk factors and opportunity factor. For example, it values the investment and effects when corporates optimize their risk.

    China Securities Index Co., Ltd., a joint venture between the Shanghai Stock Exchange and the Shenzhen Stock Exchange, specializes in the creation and management of indexes and index-related services. The CSI 300 index, compiled by the company since 2005, is a capitalization-weighted stock market index designed to replicate the performance of 300 stocks traded on the Shanghai and Shenzhen stock exchanges. Other related indexes compiled by China Securities Index Co., Ltd. includes CSI 300 Energy, Materials, Industrials, Con Disc, Cons Staples, Financials, Info Technology, Telecom Svc and Utilities.