Moody’s launches UN Global Compact rating tool

By Christine Dawson

Ratings agency Moody’s has launched a screening tool to measure companies’ alignment with United Nations Global Compact (UNGC) principles.

The Global Compact screening tool provides financial institutions with data for reporting, portfolio management and risk management.

According to Moody’s the tool helps investors integrate global ESG standards into their portfolio management. It also helps develop socially responsible investing funds and indices. For asset owners, the tool helps evaluate the ESG risk exposure of their portfolio holdings.

Users of the tool can access assessments for some 5,000 listed companies globally covering 36 datapoints; 0-100 scores and controversy screening on the UNGC’s ten principles; and negative screening for activities that contravene the UNGC exclusionary principles.

The UNGC’s ten principles require companies to operate in ways that meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption. 

The principles are derived from the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption.

Sabine Lochmann, global head of Moody’s ESG measures, said: “By committing to integrating sustainability in their portfolios, investors and other market participants can set the stage for long-term success and take shared responsibility for the transition towards a more sustainable and resilient future.”

“Our Global Compact Screening tool aids responsible investment decisions by evaluating companies’ strategies and operations against the UNGC principles,” Lochmann added.