RepRisk AG is an environmental, social, and corporate governance (ESG) data science company based in Zurich, Switzerland, specializing in ESG and business-conduct risk research, and quantitative solutions.
The company runs an online due-diligence database that allows clients to monitor and assess the risk exposure of companies, infrastructure projects, sectors, and countries related to 28 ESG issues. The issues are mapped to the 10 principles of the UN Global Compact, the Sustainability Accounting Standards Board (SASB) Materiality Map, and the United Nations Sustainable Development Goals (SDGs).RepRisk Approach And Scope. Retrieved 22 January 2021.
On a daily basis, RepRisk assesses ESG risks such as environmental degradation, human rights abuses, child labor, forced labor, fraud, and corruption that can impact an organization's reputation, financial profitability, or lead to compliance issues. Financial institutions and corporations use RepRisk to prevent and mitigate ESG and business conduct risks related to their operations, business relationships, and investments.
The RepRisk database systematically identifies ESG risks by analyzing over 100,000 sources per day in 20 major business languages. As of July 2020, the database covered more than 150,000 public and private companies, and over 40,000 infrastructure projectsRepRisk: Approach | Scope & Scale. Retrieved 22 January 2021. reported to have links to ESG risks, as well as ESG risks related to all countries and 34 different sectors. It also includes data on ESG issues and topics, over 20,000 NGOs, and over 15,000 governmental bodies.
History RepRisk was formed in 1998 as ECOFACT, a Zurich-based environmental and social risk consultancy focused on the financial sector. In 2006, its ESG risk database was created at the request of UBS, and in 2010, RepRisk split from the consultancy and became an independent company.
Methodology
Research scope and process RepRisk screens, on a daily basis, over 100,000 public sources and external stakeholders, including international and local print and online media, news websites, newsletters, NGOs, governmental bodies, think tanks, blogs and Twitter, in 20 major business languages. This screening identifies companies and projects linked to ESG-related risk. RepRisk monitors 28 ESG issues (for example local pollution, child labor or tax evasion) and 67 topic tags, or "hot topics" (such as palm oil, arctic drilling, indigenous people, coal, or water scarcity). The research scope is defined in accordance with international standards and norms, such as the ten principles of the United Nations Global Compact (UNGC) and Sustainability Accounting Standards Board (SASB).
To achieve consistent data over time, RepRisk's database uses strict, rules-based processes that incorporate both artificial intelligence and machine learning with human intelligence. The following steps outline the high level RepRisk screening process: Sources are screened through the company's proprietary AI tool that identifies risk incidents through text and metadata extraction from unstructured content, followed by multi-lingual de-duplication and clustering processes. An analyst studies adverse incidents, defines severity and novelty of each, using international standards. Relevant entities (companies, projects, sectors, and countries) are linked to the risk event, assigned a title, and a summary is completed. The compiled news passes a quality check prior to being released to the RepRisk ESG risk platform database.
RepRisk Index (RRI) The RepRisk Index (RRI) is a proprietary algorithm that dynamically captures and quantifies the reputational exposure to ESG and business conduct risks. The RRI is a quantitative measure ranging from 1 (lowest) to 100 (highest).
Companies that have been exposed to higher levels of criticism in the past are less sensitive to new adverse events and allegations in comparison to a company that experiences a first-time incident. If a company does not experience new criticism, their score will eventually drop to zero over a maximum period of two years.
A current RRI value indicates the current media and stakeholder exposure. The Peak RRI is an overall risk exposure indicator that indicates the highest level of criticism over the past two years.
The RRI score is calculated based on a number of factors, including the influence of the source of the information, the frequency and timing of criticisms, and the novelty and severity of the criticism.
RepRisk Rating (RRR) The RepRisk Rating (RRR) is a letter rating (AAA to D) and is similar to a credit rating. It facilitates benchmarking and ESG integration. Available only to companies, it combines a company's own ESG risk exposure with the ESG risk exposure of the countries and sectors in which the company has been exposed to risks. Both the Rating and the RRI are updated daily for all companies in the database.
RepRisk UN Global Compact Violator Flag This indicator identifies companies with a high potential risk of violating one or more of the ten UNGC Principles. The flag allows users to see if the UNGC violations are primarily linked to the operations or to the supply chain of a company.
Data products and services
RepRisk data is available in various formats and products and is searchable online: Benchmarking Briefs benchmark the ESG risk exposure for up to ten companies. Company Reports outline the ESG and business conduct risks for a single company, and are available via PDF. Supplier Monitoring Briefs and Portfolio Monitoring Reports are also available on a monthly or quarterly basis and identify companies in a supplier list or investment portfolio that are most exposed to ESG risks, and are most likely to violate internal policies, ethical guidelines, or international standards and are available via PDF.
Publications and research
Annual Most Controversial Companies Report Since 2013, RepRisk releases a yearly ranking of the top ten most controversial companies in the world, related to ESG issues. The ranking is based on the companies that have the highest RRI over a particular year. Rank 2009 2010 2012 2013 20142015RepRisk Most Controversial Companies List 2015. Retrieved 22 January 2012.2016RepRisk Most Controversial Companies List 2016. Retrieved 22 January 2021.2017RepRisk Most Controversial Companies List 2017. Retrieved 22 January 2021.2018https://www.reprisk.com/media/pages/news-research/modules/reports/most-controversial-companies-of-2018/3452997049-1608291220/mcc-2018.pdf 2019 1 Peanut Corporation of America Transocean. Tazreen Fashions FIFA Chonghaejin MarineRuihai International Logistics Co1Malaysia Development BerhadThe Weinstein CompanyLion AirTechnischer Überwachungsverein 2 Vedanta Resources BP Olympus Corporation Punta Fa SL (Mango) Takata CorporationUberMossack FonsecaKobe SteelXe-Pian Xe-Namnoy Power Co (PNPC)Jiangsu Tianjiayi Chemical Co 3 Newmont Mining Corporation Vedanta Resources Lonmin Comigel Chang Guann CompanySamarcoSamarcoJ&F InvestimentosPunjab National BankHacienda Health Care 4 Rio Tinto ExxonMobil News Corp HSBC Zhongrong Metal ProductsTakata Corporation.Jiangsu Changlong Chemicals CoAppleby Global Group Services. (Paradise Papers)Changsheng Bio-TechnologyWilke Waldecker Fleisch- und Wurstwaren GmbH & Co 5 Walmart Foxconn Samsung Group Findus Group. UberBlue Bell CreameriesDaewoo Shipbuilding & Marine Engineering UnaoilStalreiniging Barneveld (Chickfriend)JBS TollesonBurning Sun Entertainment Co 6 Siemens Chevron Group HSBC Fonterra Co-operative Group FIFAHSBC Private Bank Equifax.Danske Bank EstoniaLubrizol Corp20 7 KBR BG Group Reebok GlaxoSmithKline Dongguan Shinyang ElectronicsSonyRizal Commercial Banking CorporationRolls-Royce HoldingsCambridge AnalyticaGuangzhou R&F Properties 8 ExxonMobil Royal Dutch Shell ING Bank BNP Paribas General MotorsVolkswagenLotte CorporationOdebrecht SAAutostrade per l'Italia SpASamherji hf 9 BP Sinar Mas Group Wyeth ICAP KT ENS CorporationFIFAVolkswagenPDVSAGreenyardHenan Coal Gas Group Co 10 BHP Billiton Magyar Aluminium Telia Company Samsung Neiman Marcus1Malaysia Development Berhad / Odebrecht / General Motors / HondaOdebrecht SATransnet.Keppel Offshore & MarineIntercontinental Terminals Co
Annual Most Controversial Projects Report Since 2013, RepRisk releases a yearly ranking of the top ten most controversial projects in the world, related to ESG issues. The ranking is based on the projects that have the highest RRI over a particular year. Rank20132014RepRisk Most Controversial Projects List 2014. Retrieved 22 January 2021.2015RepRisk Most Controversial Projects List 2015. Retrieved Jan 22, 2021.2016RepRisk Most Controversial Projects List 2016. Retrieved 22 January 2021.2017RepRisk Most Controversial Projects List 2017. Retrieved 22 January 2021.2018Most Controversial Projects of 2018. RepRisk. Retrieved 25 January 2021.1Rana PlazaKunshan Zhongrong Metmmigration FactoryRajput Polyester FactoryFengcheng Power Plant Phase 3Grenfell TowerWinter Cherry Trade and Leisure Center2Pegasus PipelineBuenavista del Cobre Mine (Cananea Mine)Valenzuela Slipper FactoryHong'ao Landfill (Hong Ao Landfill; Hongao Construction Waste Dump)Ctrip Day Care CenterSanchi Tanker 3Big Gossan MineSoma Komur Isletmeleri MineVostochnyi Spaceport (Vostochny Kosmodrom)ETP Crude Pipeline Project (Bakken pipeline; Dakota Access Pipeline)Fu Yuan Lu Leng 999 VesselCraon Celia Factory 4Four Rivers Refurbishment ProjectAbbot Point Port ExpansionTia Mia Gold Mining ProjectAliso Canyon Natural Gas Storage FacilityBrook House Immigration Removal CentrePolokwane Factory5Fukushima Daiichi Nuclear Power PlantMauna Ocean ResortAngra 3 Nuclear ReactorSports Direct Shirebrook WarehouseNord Stream 2 gas pipelineOne Belt One Road Initiative 6Foxconn Zhengzhou Technology Park2022 FIFA World CupHpakant Gyi Jade Mine / Carmichael Coal Mine / Rail Project (Galilee Basin Project)Petroquimica Mexicana de Vinilo (PMV) PlantJalabiyaCement WorksPatel Dam 7Gyama Polymetallic MineMount Polley MineIlha Pura Olympic VillageAgua Zarca Hydroelectric ProjectOPL 245 Oil BlockHyde County Farm8Mtwara Dar es Salaam PipelineQingdao PortLong Lake Oil Sands ProjectTongi Packaging Plant (Tampaco Foils)Changwon Jinhae ShipyardTuticorin Copper Smelter Plant9Rustenburg Chrome MineMoscow MetroFormosa Fun Coast Water ParkAngra dos Reis Nuclear Complex (Almirante Alvaro Alberto Nuclear Complex) / Jinshangou Coal MineGuangzhou No 7 Thermal Power PlantItuango Hydroelectric Power Project10San Jose del Progreso Gold and SilverDan River Steam StationGrand Mosque Expansion ProjectImperial Pacific Resort HotelBarcarena Alumina Refinery
Research The Effect Of Bad News On Credit Risk (Research Study): Julian Koelbel, a PhD student at the Swiss Federal Institute of Technology (ETH) in Zurich, used RepRisk data in the research study: The effect of bad news on credit risk: a media based view of the pricing of corporate social responsibility. The paper, which won an Award for Excellence in Responsible Investment Research at the UN PRI's annual Academic Network conference in 2013, highlighted that more negative news on CSR issues are associated with higher credit default swap spreads. The study is published in the Strategic Management Journal. ESG Alpha in China (Research Study): Michael Barnett of the Centre for Corporate Reputation at Oxford University, and Jimmy Chen, Andreas Hoepner and Qian Li from the Centre for Responsible Banking & Finance at the University of St Andrews, used RepRisk data as the basis for their recent research paper, "ESG Alpha in China." The research paper, which investigated the effect of ESG risks on the share performance of Chinese firms and found that ESG criteria can be used to generate alpha for investments in Chinese companies, won the European PRI award in the category of Investment Strategy.