ESG Factor-IN

Innovative methodology to determine the economic performance of ESG factors.

Our ESG analysts have selected 230 ESG factors that are susceptible of creating an impact on the economic performance of countries. Countries are regrouped in 5 groups related to their level of development (GDP/capita).

Environment Social Governance
E01. Climate Change S01. Demographics – Life conditions G01. Democratic Life
E02. Energy Efficiency S02. Demographics – Dynamic G02. Political Stability
E03. Energy Security S03. Economic Inequality G03. Corruption
E04. Energy Infrastructures S04. Gender Inequality G04. Political Effectiveness
E05. Pollution S05. Employment G05. Security
E06. Biodiversity S06. Labor & Social Protection G06. Business Rights
E07. Resource & Depletion S07. Education G07. Rent Dependency
E08. Water Scarcity S08. Innovation & Human Capital
E09. Water Infrastructures S09. Health Issues
E10. Land Resources S10. Health Infrastructure
E11. Agriculture & Food S11. Vulnerability
E12. Transport Infrastructures S12. Lifestyle Risks
We use advanced statistical models to identify ESG factors that demonstrate an explanation capacity of GDP.
These ESG factors are relatively weighted in ordre to reflect their impact on GDP evolution and taking into account information redundancies and variable relationships.
For each significant ESG indicator, we compare the performance of a given country against its peers.
Based on this comparison, we determine a level of over or under-performance of the given country.

An average score is calculated for each E, S, G indicator within each countries cluster. Then each country is positionned vs. its pairs as regards its E, S ang G performance scores. We therefore determine if the country over/under-perform against its pairs depending on its revenue / capita. Finally we recalculte the adjusted GDP / capita of the country.

This adjusted GDP /capita is calculated yearly.


Applications of the ESG Factor-IN methodology

  • Identification of new risks signals from extra-financial factors
  • Aggregated ESG performance score at country level
  • Assessment of the impact of ESG factors on economic performance
  • Early warning of ESG under/over performance with regard to GDP
  • Monitoring performance discrepancies between E, S, G and GDP, as harbingers of upcoming market corrections

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