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September 6, 2021 
 
Re: Public Comment on ESG Ratings and Data Products Providers 
 
To the Board of IOSCO, 
Deutsche Börse Group (DBG) welcomes the opportunity to submit a response to the IOSCO Consultation 
Report regarding Environmental, Social and Governance (ESG) Ratings and Data Products Providers (the 
“Report”). The demand for ESG data and services is surging among investors and asset managers looking 
for sustainable investments. ESG data plays an important role in matching supply and demand for 
sustainable investment and in facilitating the transition to a more sustainable economy, allowing the 
optimal allocation of capital to cleaner companies and infrastructures. DBG truly appreciates the efforts 
by IOSCO, in particular the in-depth analysis and insights provided, as well as the willingness to listen to 
industry and stakeholders. From the conversations we have had in various fora, it is our understanding 
that addressing this topic with a global approach is of key importance, and potential policy responses 
across jurisdictions must be coordinated, hence we see an evident role of IOSCO in this regard. 
We hope that sharing our experiences and practices will provide added value in addition to IOSCOs 
analytical work by contributing from a provider perspective. Therefore, we will in some instances within 
our response explain in a rather granular way how business is set up, which best practices already exist to 
ensure data quality/good governance/address market demands etc. 
Due to the complementary nature of our businesses within our Group we aim offer a unique perspective 
to IOSCO and the broader interested audience covering a wide range of IOSCO’s recommendations: 
• 
directed to ESG service providers through our ESG data, analytics and service provider 
Institutional Shareholder Services Inc (ISS) in which we hold a majority stake, 
• 
directed to users of ESG services through our analytics and index provider Qontigo and our 
derivatives exchange Eurex, as well as 
• 
from a preparer perspective through our own Group reporting. 
 
ISS ESG, the responsible investment arm of ISS, is the world’s leading provider of environmental, social, 
and governance solutions for more than 1,100 global clients spanning asset owners, asset managers, 
hedge funds, and asset servicing providers. ISS ESG delivers differentiated sustainability services and a 
suite of solutions to its clients, drawing on a team of more than 460 global professionals with thematic

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and sector expertise that underpin our commitment to sustainable finance. With more than 35 years of 
corporate governance expertise and 25 years of providing in-depth responsible investment research and 
analytics to include a dedicated global climate research team, ISS ESG has a unique understanding of the 
requirements of institutional investors. With its comprehensive offering of solutions, ISS ESG enables 
investors to develop and integrate responsible investing policies and practices, thoughtfully engage 
portfolio companies on responsible investment issues, and monitor their practices through screening 
solutions. It also provides climate data, analytics, and advisory services to help financial market 
participants understand, measure, and act on climate-related risks across all asset classes. In addition, ISS 
ESG delivers corporate and country ESG research and ratings, enabling its clients to identify material social 
and environmental risks and opportunities. 
In addition, as one of the largest providers of market infrastructure worldwide, DBG offer a broad range 
of products and services. For example, we develop market leading ESG indices and analytics solutions via 
our subsidiary Qontigo (with its brands STOXX, DAX, Axioma) and offer ESG derivatives via our derivatives 
exchange Eurex. 
Last but not least, Deutsche Börse AG as a listed company reports ESG information and is subject to ESG 
ratings itself. We therefore cover the preparer perspective as well. In this regard it is important to stress 
that these activities all remain independent and treated separately. Please see response under 
recommendation 3 and 4, for further information on conflict of interest considerations in this regard. 
 
The rapid developments in the industrial landscape over the last years have enriched the range of services 
offered by players. Initially, ESG services were limited to the provision of raw environmental, social and 
governance data, as well as the production of scores, ratings and analyses assessing the non-financial 
performance of companies. ESG data providers today offer a wide and diverse range of products and 
services that adapt to the changing needs expressed by clients, primarily financial institutions (including 
institutional investors and asset managers) and, to a lesser extent, companies. This new offering 
frequently includes activities such as portfolio analysis, construction of financial indices, or advisory 
services to companies in defining their ESG strategy. Other more specific activities are less widespread, 
such as investment fund management, proxy advisory services, or the evaluation and certification of 
financing products such as green bonds. 
Quality ESG data is the lifeblood of ESG investment analysis. Different types of companies have different 
uses for ESG ratings and ESG data: 
• 
For a large corporation, an ESG rating or data point may provide senior managers with a better 
understanding of their business risks and potential areas of improvement. 
• 
For banks and insurance companies, ESG data could be used as an input into due diligence and 
risk management. Both banking and insurance professionals are often responsible for deciding 
whether to extend a loan or an insurance policy to a particular business, and at what interest rate 
or insurance premium. These professionals rely on ESG data to evaluate the relevant ESG risks for 
a business, which can then be used to estimate the chances of a default or a coverage trigger and 
thereby determine an appropriate risk-return trade-off. 
• 
By far the biggest consumers of ESG ratings and data to-date are institutional investors and 
investment management firms. This should come as no surprise given that ESG factors are well 
understood to affect a company’s performance, and therefore have the potential to affect an 
investor’s portfolio and financial returns.

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In many ways, the increased relevance of ESG ratings has arisen as a result of positive developments in 
other areas of legislative attention, particularly the requirement for market participants to more 
systematically take ESG factors into account in their investment decisions and risk management 
processes. However, we consider that increasing demand for assessments that provide insights on an 
entity’s ESG profile should go hand in hand with safeguards that ensure the information referred to is 
robust and that assessments are reliable so to prevent the risk of greenwashing. 
Nevertheless, the market for ESG ratings and assessments is complex and still developing. The industry is 
going through a simultaneous process of innovation on the products side and consolidation on the 
providers’ side. As such, any actions in this area need to be carefully calibrated to capture the broad 
spectrum of existing product offerings, while at the same time leaving room for future innovations. 
 
We hope that you will find our comments and suggestions useful and we are available should you wish to 
discuss any particular matter in further detail. 
The attached annex reflects our response to the specific recommendations in the Report. 
 
 
Yours sincerely, 
 
Niels Brab 
Head of Group Regulatory Strategy 
Chief Regulatory Officer 
Member of the IOSCO Affiliate Members Consultative Committee 
Deutsche Börse Group

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Annex 
 
Section 1 – Proposed Recommendations for IOSCO and IOSCO Members concerning ESG 
ratings and data products 
Recommendation 1: Regulators may wish to consider focusing more attention on the use of ESG 
ratings and data products and ESG ratings and data products providers in their jurisdictions. 
 
The strong growth of responsible investment practices has led to a steep increase in the demand for ESG 
data and related products and services. Almost all investors now use third party providers for obtaining 
at least some of their ESG data and analysis, and some investors even predominantly rely on externally 
processed data and other resources like ESG scores. 
Given that ESG ratings and data products play such an important role in investment decision-making, it is 
paramount that these products are reliable, high quality and transparent. Taking steps to improve the 
governance, transparency and management of conflicts of interest surrounding these products could in 
turn contribute to a greater level of confidence in the use of these products within the financial system, 
supporting a greater up-take in usage while simultaneously protecting investors and ensuring that 
markets are fair and efficient. 
The availability of reliable and high-quality ESG data is also a critical component of ESG ratings and data 
products and determines to a large extent the quality of the products. Therefore, the lack of reliable, 
consistent, and comparable ESG standards and disclosures from issuers impacts not only the availability 
and quality of information that can be used by investors, but also by ESG ratings and data products 
providers. Current global efforts led by the IFRS Foundation to establish a global baseline for corporate 
sustainability reporting focused on enterprise value creation and regional developments that introduce 
or expand corporate ESG standards and disclosure requirements, can help to address this issue, and are 
particularly welcome. Regulators should continue to support these processes and work to align standards 
and disclosure requirements for corporates where possible. 
From an ESG ratings and data provider perspective, we would like to highlight that transparent, 
structured, quality assured, evidence-based, independent research and analysis of ESG risks and 
opportunities are the hallmark of any responsible investment program and both reflect and support 
expanding and evolving investor considerations and institutional use-cases in incorporating ESG strategies 
into fundamental analysis. Clients rely on ISS ESG’s data and analytical offerings in a number of different 
ways. Many use the solutions to facilitate a top-down assessment of portfolio risk exposure, from 
reputational and business risks arising from controversies, such as breaches of global norms, to risks 
arising from climate change (both physical and transitional).  Other clients, meanwhile, use ISS ESG ratings 
in their bottom-up stock selection, to identify material ESG issues, as well as to measure performance 
against ESG targets. Knowledge of risk factors, and a deep understanding of how companies mitigate these 
ESG risks can add a valuable layer to investment analysis. 
Investors are not of a single mind with respect to ESG issues and how they incorporate ESG ratings and 
data into their investment processes. As a result, they seek the advice and support of solutions providers 
based on an alignment with their investment philosophies and engagement practices. ESG ratings and 
data is one of many factors considered as part of the investment-decision making process and typically 
does not unilaterally augment capital allocation and investment decisions. In addition, the use of ESG 
research and data providers positively assists institutional investors in carrying out their fiduciary

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obligations and stewardship responsibilities. The PRI and the CFA Society both point to the fact that there 
is no “one size fits all” ESG integration approach as implications for ESG investing may differ across asset 
class, geography, local market practices, ESG footprint/exposure, sector concentration, among other 
considerations. 
So, as regulators consider focusing more attention on the use of ESG ratings and data products, we believe 
it is critical to avoid taking steps that would undermine the ability of the ratings and data providers to 
produce and deliver the independent and informed ESG research and analysis necessary to address a 
rapidly evolving ESG landscape. ESG research providers supply investors with specialized expertise, 
efficiency, and scale across a variety of complicated global ESG issues and it important that providers 
retain the ability to continue meeting that critical investor need. 
DBG firmly believes it is imperative that research providers develop and deliver their offerings with a high 
level of independence and transparency, given the importance of ESG ratings and data to investors. In our 
view, this includes: (1) disclosing publicly conflict of interest policies; (2) leveraging existing industry best 
practices; and (3) implementing and disclosing governance and operational structures that establish a 
quality focused infrastructure consisting of internal controls, documentation, quality assurance, 
escalation procedures, monitoring, and policy development.  This imperative also demands transparency 
regarding the underlying research methodologies as well as the processes by which research and data 
solutions are produced and delivered. This transparency enables clients to select the tools and services 
best suited to successfully aid them in implementing their investment strategies.  It also provides 
assurance to the market as a whole, including the companies that are the subjects of ESG ratings and 
research, as to the efficacy of these offerings. 
ISS ESG has developed the following quality assurance approach to ensure that these tenets are reflected 
in our research offerings: 
• 
Sound Knowledge-Management Program: documented reliable structures and processes 
through business-process mapping and internal dashboards to ensure objectivity and accuracy of 
research production and implementation 
• 
Internal Controls: established internal controls to monitor methodology alignment, accuracy, and 
completeness of information. This applies to both research content and underlying processes 
• 
Quality Management: a process-focused program that leads the knowledge-management and 
internal control functions within ESG research and sits within ISS ESG’s Methodology team 
• 
Quality Assurance: Implementation of a team dedicated to content assurance that is independent 
of the production teams and randomly samples research to enhance and ensure accuracy, above 
all else, and that professional standards are met and exceeded 
• 
Functional and Independent Structures: The separation and reporting of the ESG Research team 
from any commercially driven functional teams, including product, sales, and client success 
• 
Methodology Review Board: An independent review board that consists of content-focused 
individuals and which does not involve any commercially focused input into the formulation of 
research methodology and decision making 
 
ISS ESG promotes transparency and quality in ESG research methodologies and processes and has set up 
a dedicated publicly accessible website outlining our methodologies and the quality and research 
processes spanning our various ESG solutions. To help ensure the quality of ISS ESG’s analysis, ISS ESG has 
a Global ESG Methodology governance structure in place that is responsible for reviewing and updating 
methodologies in order to keep up with the latest developments and findings in the sustainability domain.

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ISS ESG’s systematic and comprehensive approach to research utilizes a combination of source- 
monitoring, data collection, analysis, validation, and verification. Each service employs a specialised and 
distinct approach designed to ensure near complete coverage across companies, regardless of geography, 
industry, or company size. The ISS ESG research team conducts systematic source- monitoring to identify 
relevant information as it becomes available. Assessments undergo a rigorous data collection process, 
including peer review. In addition, for many data sets, the research team conducts fact-finding dialogue 
with companies to provide supplementary detail and confirmation of involvement. Finally, a regular 
update is typically carried out on covered companies annually. 
Additionally, ISS ESG’s Data Strategy unit is responsible for maintaining data integrity across ESG research 
areas. ISS ESG’s data stewards develop and support transparent standards and processes for data 
collection and data verification and maintain comprehensive metadata documentation. In addition, ISS 
ESG’s data stewards collaborate closely with an internal team of data scientists to drive accuracy, 
timeliness, and operational efficiency, and to identify trends through analytical reporting. 
Looking at this from the user perspective angle, ESG ratings and data products underpin many ESG indices, 
and screening criteria for certain ESG-oriented products. For example, in the context of ESG benchmark 
construction challenges can arise, with the choice of ESG rating provider significantly impacting the 
constituents of those indices. Considering current growth trends in Europe in sustainable investing and 
passive investment products such as ETFs, measures aiming to reduce the risk of capital misallocation will 
become crucial to facilitate the transition to a more sustainable financial system. Similarly, the fact that 
companies in highly polluting industries can obtain high environmental scores from some ESG rating 
providers can lead to investor confusion and highlights the need for greater transparency. 
For example, we have experienced cases of data that is not consistent with the stated methodologies (for 
example, the methodology states a certain timeline for updating underlying indicators that is in practice 
delayed by a year). One of the recommendations by IOSCO is to ensure that it is, which we support. 
Another challenge is the sometimes missing margin of error/uncertainty. Furthermore, there has been 
issues around methodological changes by providers, which impair the user experience and sometimes the 
investment product they offer based of these data. 
However, it is important to keep in mind that the fast-moving environment with new scientific findings 
and recommendations, as well as new regulation also requires regular methodology updates. 
 
Section 2 – Proposed Recommendations for ESG ratings and data products providers 
Recommendation 2: ESG ratings and data products providers could consider issuing high quality ESG 
ratings and data products based on publicly disclosed data sources where possible and other 
information sources where necessary, using transparent and defined methodologies. 
 
We believe the most suitable way forward is to propose high level guidance for ESG ratings and data 
products providers that is sufficiently flexible to accommodate the developing nature of this market. 
The variety of ratings for example mirrors to a large extent the diversified demand coming from multiple 
types of clients and how the information is put to use. A large majority of asset managers favour such 
variety, even as many support greater standardisation and transparency. 
DBG agrees that ESG ratings and data providers must provide high quality ESG ratings and data products 
based on publicly disclosed data sources where possible, and other information sources where necessary, 
using transparent and defined methodologies. Our response above to Recommendation 1 outlines the

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approach that ISS ESG takes to ensure a high level of quality in the products that we offer, as well as the 
steps we take regarding transparency of methodologies. 
With respect to the use of data sources, ISS ESG’s general approach is to rely primarily on publicly available 
data.  Data is sourced from publicly available information, including a company’s own disclosures and 
reporting such as proxy statements, reputable news sources, and information made available by 
governmental and international institutions. 
To enhance the quality, credibility, completeness, and usefulness of the ESG assessments for our investor 
clients, ISS ESG accepts and uses supplementary non-public information which may be relevant for ESG 
performance assessments. We value non-public supplementary information as an accretive and value-
added aspect of our ESG investor research platform. 
This approach is considered a key differentiator of ISS ESG research as: 
• 
public reporting on some relevant ESG issues is still at an initial and incomplete stage, particularly 
for private companies, small and mid-size enterprises, and those in emerging markets; 
• 
new ESG topics and reporting items continue to evolve with emerging voluntary standards and 
regulation still developing; 
• 
there is a lot of mainly qualitative ESG information relevant to ISS ESG’s forward-looking and 
cutting-edge research, which is already available at the companies in the form of internal 
documents but in some cases not yet publicly disclosed; and 
• 
non-material information provided by the issuers on proposed or pending remedial action for 
controversies discussed in any engagement process will need to be considered in a timely manner. 
However, to foster transparency and to provide accountability to all other stakeholders, it is our strong 
preference that all information is made publicly available by companies. 
In any event and importantly, ISS ESG does not and will not solicit, accept or use in its research material 
non-public information (where materiality is defined from a traditional securities law perspective to mean 
information that has not been adequately disclosed to the general public and which would likely affect 
the price of a security or where the information, if disclosed, would influence a reasonable investor’s 
decision to purchase, sell or hold an issuers’ security). 
We therefore welcome global and regional efforts by regulators to improve the reliability, consistency, 
and comparability of corporate ESG standards and disclosures. These efforts are crucial to increase the 
availability and quality of ESG data, and by extension the quality of ESG ratings and data products. 
 
Recommendation 3: ESG ratings and data products providers could consider ensuring their decisions 
are, to the best of their knowledge, independent and free from political or economic pressures and 
from conflicts of interest arising due to the ESG ratings and data products providers’ organizational 
structure, business or financial activities, or the financial interests of the ESG ratings and ESG data 
products providers’ employees. 
 
Recommendation 4: ESG ratings and data products providers could consider, on a best efforts basis, 
avoiding activities, procedures or relationships that may compromise or appear to compromise the 
independence and objectivity of the ESG rating and ESG data products provider’s operations or 
identifying, managing and mitigating the activities that may lead to those compromises.

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DGB agrees that ESG ratings and data products providers – like other product and service providers in the 
financial markets – should have appropriate governance arrangements in place and that offered products 
and services are free of conflict of interest or other undue influences. 
In response to both Recommendations 3 and 4, we would like to highlight that as service provider to 
institutional investors, ISS understands and takes extremely seriously the potential for actual or perceived 
conflicts of interest which might impact the integrity of the research and services we provide to our clients. 
Such potential conflicts of interest need to be effectively managed and mitigated by appropriate 
measures. 
ISS provides its institutional investor clients with extensive information to facilitate that they are fully 
informed of potential conflicts and the steps that ISS has taken to address them. Among other things, ISS 
supplies a comprehensive due diligence section on its website to assist clients and prospective clients in 
fulfilling their own obligations regarding the use of independent, third-party providers of ESG ratings or 
data products. This section of the ISS website includes an area specifically dedicated to the policies, 
procedures and practices regarding potential conflicts of interest.  In addition, many of ISS’ clients conduct 
their own due diligence regarding the way ISS implements the procedures governing conflicts and perform 
diligence calls and visits to satisfy themselves that ISS’ rules governing conflicts are robust and effectively 
adhered to. 
In general, ISS has identified three primary types of potential conflicts: 
• 
ISS’ owners could seek to influence the formulation and application of ISS policies; 
• 
Institutional clients could seek to influence the advice given to other institutional; or 
• 
Corporate issuer clients of ISS’ wholly-owned subsidiary, ISS Corporate Solutions, Inc. (“ICS”), 
could seek to influence the advice given to institutional clients. 
Concerning the first potential conflict, Deutsche Börse AG (“DB”) owns an approximate 80% stake in ISS 
HoldCo Inc., the holding company which wholly owns ISS. The remainder of ISS HoldCo Inc. is held by a 
combination of Genstar Capital (“Genstar”) and ISS management. ISS has formally adopted policies on 
non-interference and potential conflicts of interest related to DB, Genstar, and the board of directors of 
ISS HoldCo Inc. These policies are intended to establish appropriate standards and procedures to protect 
the integrity and independence of the research, recommendations, ratings and other analytical offerings 
(“Research Offerings”) produced by ISS and to safeguard the reputations of ISS and its owners. 
Among other things, these policies provide that: 
• 
Subject parties (as defined in each applicable policy) may not participate, seek to influence, or 
have any role in the formulation, development and application of ISS’ Research Offerings. In 
addition, these subject parties will not receive advance notice of any proposed or pending 
changes to the policy guidelines, methodologies, or standards underlying the Research Offerings 
of ISS. 
• 
Subject parties may not participate in, seek to influence, or have any role in the formulation, 
development and application of the policy guidelines, methodologies and standards underling ISS’ 
Research Offerings including, without limitation, the establishment of the methodologies and 
standards underling the Research Offerings of ISS.

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• 
Subject parties will not receive or be provided with access to copies of, or the analyses and 
conclusions contained in, any of the Research Offerings of ISS prior to the time that any such 
offerings are published or disseminated. 
• 
Subject parties will not have access to any data relating to the portfolio, investment strategy or 
securities holdings of ISS clients. 
These policies are publicly available on ISS’ website1. 
Concerning the second potential conflict, ISS is a policy-based organization and uses a series of published 
methodologies that provide a very practical check and balance to facilitate the integrity and independence 
of ISS ESG’s ratings and data products. ISS research analysts follow these comprehensive policy guidelines 
when conducting research for the benefit of clients. 
The third potential conflict is between ISS’ core business for the benefit of institutional investors, and the 
work of ICS, which sells analytic tools and services directly to issuers. We believe that ICS’ work with 
corporate issuers helps companies better understand the ESG expectations of their shareholder bases and 
empowers them to enhance their practices, which ultimately benefits all shareholders. At the same time, 
we understand the potential for conflict that arises when ICS provides advice to an issuer on which ISS 
ESG provides research coverage, and we therefore take a number of measures to prevent such potential 
conflict from becoming an actual conflict. 
We manage this through a combination of disclosure to clients, consistent and transparent application of 
methodologies, a robust compliance program and implementation of a firewall designed to prevent 
information flows around the identity of the ICS clients. 
ISS has adopted a Code of Ethics which affirms ISS’ relationship of trust with its clients and obligates ISS 
to carry out its duties solely in the best interest of clients and free from all compromising influences and 
loyalties. 
The Code of Ethics devotes special attention to preventing and disclosing conflicts of interest. In this 
regard, the Code of Ethics addresses the potential conflicts between the company’s research teams and 
other services provided by subsidiaries or affiliates, conflicts within the institutional advisory business, 
conflicts arising from an analyst’s stock ownership, conflicts in connection with an issuer’s review of a 
draft ISS report, and conflicts generally. In each case, the goal of the Code of Ethics is to prevent conflicts 
wherever possible, and more generally to manage and disclose potential or actual conflicts. 
In addition to its Code of Ethics, ISS has developed a General Code of Conduct. The General Code of 
Conduct is a broad-based “good practices” code that provides a framework to address general corporate 
policies and practices that apply to ISS as a global business. The areas covered in the General Code of 
Conduct include: 
• 
Doing the Right Thing; 
• 
Protecting the Company’s Interests; 
• 
Safeguarding and Maintaining Information; 
• 
Treat Others with Dignity and Respect; 
• 
Promote a Safe and Healthy Working Environment; 
 
1 See: http://www.issgovernance.com/compliance/due-diligence-materials/

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Violations of the General Code of Conduct; 
• 
Reporting Concerns; and  
• 
Compliance Requirements 
Employees are trained on the content of these codes and are required to certify their adherence. 
ISS has implemented a firewall which includes the physical, functional, and technological separation 
between ICS and the ISS research function. A key goal of this firewall is to protect against members of ISS’ 
research teams from knowing the identity of ICS’ clients. Enabling the research team to work without 
knowing the identity of ICS’ clients is part of our approach to ensuring the objectivity and independence 
of ISS’ research process. 
ISS is transparent about its ICS business and the entire business is described in detail on our public 
website2.  Additionally, ISS’ standard institutional client contract contains disclosures regarding ICS and its 
work with corporate issuers, and each research report issued by ISS contains a legend indicating that the 
subject of the analysis or report may be a client of ICS and reminds ISS’ institutional clients of how they 
can inquire about any issuer’s use of ICS products and services. Thus, ISS provides institutional clients the 
ability to obtain information regarding ICS' dealings with corporate issuers, including the amount of 
compensation that the firm has received or will receive from the issuer. 
In supplement of the foregoing, in 2014 ISS adopted a “Policy Regarding Disclosure of Significant 
Relationships.”  In brief, this policy includes as “significant” the relationships ISS has with issuers that are 
clients of ICS and information about those issuers is provided as noted in the prior paragraph. 
In addition, the policy also makes provision for disclosure of relationships with clients that are publicly 
traded institutional investors, as well as clients that act as shareholder proponents, in light of the potential 
that such a client might use the relationship, and the revenue provided by the client to ISS, to try to exert 
influence on ISS’ research and voting recommendations. Under the circumstances of these relationships, 
and the nature of the potential conflict, the assessment of whether a relationship is “significant” is subject 
to a specified threshold of the percentage of overall revenue provided by the subject client. The 
relationship with DB is also considered “significant” by virtue of it being a majority owner of ISS. 
We believe that these disclosures are an effective and transparent way of disclosing to our institutional 
investor clients without compromising the effectiveness of the ISS firewall. The process provides for full 
disclosure to clients while also upholding the firewall and arranging that the identity of an ICS client is 
not known to research analysts as they undertake research. 
 
Recommendation 5: ESG ratings and data products providers could consider making high levels of 
public disclosure and transparency an objective in their ESG ratings and data products, including their 
methodologies and processes. 
 
As discussed in response to Recommendation 1, DBG agrees with the principle of public disclosure and 
transparency regarding the underlying research methodologies as well as the processes by which research 
and data solutions are produced and delivered.  At the same time we think it is critically important that 
 
2 See: http://www.issgovernance.com/corporateissuers

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providers have the freedom and flexibility to preserve as they determine appropriate their intellectual 
property rights in and to their work product and the factors which go into creating that work product. 
Looking at ISS ESG, it practices a high level of public transparency across its ESG research solutions and 
does so in a way that provides all stakeholders with the critical information they need to understand how 
ISS ESG operates and the basis upon which we generate our analyses, form our conclusions and develop 
our assessments.  For example, for the ISS ESG Corporate Rating, it publicly disclose the measurement 
objective of the ESG rating, the principal sources of qualitative and quantitative information used in the 
assessment as well as information on how the absence of information was treated; along with the time 
horizon of the assessment. 
We firmly believe in the value of transparency as a catalyst for selecting the best ESG solutions to support 
and facilitate investor agendas. Our methodology transparency ensures credible and reproducible results, 
serves to engage rated/analyzed issuers, and allows for flexible use and customization of deliverables by 
our investor clients. 
 
Recommendation 6: ESG ratings and data products providers could consider maintaining in 
confidence all non-public information communicated to them by any company, or its agents, related 
to their ESG ratings and data products, in a manner appropriate in the circumstances. 
 
As discussed in response to Recommendation 2, the data which ISS ESG uses is primarily sourced from 
publicly available information although ISS ESG will accept and use supplementary non-public information 
which may be relevant for ESG performance assessments so long as that non-public information is not 
“material” (from a securities law point of view as outlined above). 
With respect to any such non-public information, ISS ESG’s current approach is that we will not distribute 
to third parties any non-public supplementary information provided by a company. ISS ESG will, however, 
reference such information in its reports and other offerings. 
 
Section 3 – Proposed Recommendation for users of ESG ratings and data products 
Recommendation 7: Financial market participants could consider conducting due diligence on the 
ESG ratings and data products that they use in their internal processes. This due diligence could 
include an understanding of what is being rated or assessed by the product, how it is being rated or 
assessed and, limitations and the purposes for which the product is being used. 
 
Investors or other users of ESG ratings and data products should ensure they understand the intended 
purpose and methodology of the product, and to determine whether it is suitable for the purpose for 
which it is being used in the investment process. Ultimately, investors decide on what ESG information 
and analysis is incorporated in their investment decisions and therefore bear the responsibility to ensure 
that any ESG ratings or data products used in the investment process are fit for purpose. 
From a provider perspective, as noted in response to Recommendations 3 and 4, ISS provides its clients 
(and other stakeholders) with a wealth of publicly available information that supports the type of due 
diligence efforts contemplated by Recommendation 7. In addition to these publicly available materials, 
ISS supports clients and prospects with due diligence calls and visits, along with more detailed 
product/methodology documentation to help that clients and prospects fully understand ISS’ internal

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processes and the manner in which our offerings are developed, empowering our clients to understand 
exactly how companies are being rated or assessed and enabling them to properly use our offerings within 
their own investment processes. 
Furthermore, we also agree with the recommendation from a user perspective and conduct such a 
formalized internal due-diligence process already (please see slide below, outlining how this in conducted 
within our analytics and index provider Qontigo). 
 
 
 
Section 4 – Proposed Recommendation on how ESG ratings and data products providers may 
wish to consider interacting with entities subject to assessment 
Recommendation 8: ESG ratings and data products providers could consider improving information 
gathering processes with entities covered by their products in a manner that is efficient and leads to 
more effective outcomes for both the providers and these entities 
 
Recommendation 9: ESG ratings and data products providers could consider responding to and 
addressing issues flagged by entities covered by their ESG ratings and data products while maintaining 
the objectivity of these products. 
 
We would like to highlight that ISS ESG takes a measured approach to dialogue with companies and key 
stakeholders, recognizing the importance of first-hand information and insights, while being cognizant of 
the need to minimize response burden. During the research phase ISS ESG engages in a targeted dialogue 
with companies as and if necessary, to seek confirmation that the information obtained from public 
sources is complete, accurate, and up-to-date. This provides for transparency, and, critically, confirms the 
validity and relevance of research findings for investment decisions. 
A simplified illustration of core data collection and research processes is provided below. Systematic and 
rigorous quality assurance measures throughout data collection, generally coupled with the submission

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of data and ESG draft reports to companies for verification and confirmation of facts, are part of assuring 
the high quality of our research. 
 
 
ISS ESG takes an open and transparent approach in relation to corporate issuers and seeks to provide 
issuers with insight into and understanding of our research processes and methodologies as well as the 
data and analyses that are integrated into our reports. Questions and feedback can be submitted through 
our central ESG Helpdesk. 
Moreover, through our publicly available document, Frequently Asked Questions: A Guide for Corporate 
Issuers, companies can obtain further background about our research and details about our processes. 
 
Section 5 – Proposed Recommendation on how covered entities could consider interacting 
with ESG ratings and data products providers 
Recommendation 10: Entities subject to assessment by ESG ratings and data products providers could 
consider streamlining their disclosure processes for sustainability related information to the extent 
possible, bearing in mind regulatory and other legal requirements in their jurisdictions 
 
DBG welcomes the recommendation to issuers to consolidate, publish and update their sustainability 
information in one dedicated location that is easily and digitally accessible. This would not only help ESG 
ratings and data products providers, but also make it easier for investors to obtain ‘raw’ ESG data directly 
from issuers. 
The traditional supply of raw data and ratings has developed, with in particular an increase in coverage, 
both in terms of geography, sector and asset class, and in terms of the historical depth of the data 
available. However, it is characterized by significant disparities in data collection, reliability and 
processing, which are at the root of major discrepancies in the non-financial performance assessments 
produced. 
Therefore, from an ESG ratings and data provider perspective, we would like again stress that ISS ESG 
extensively uses public company reporting as one of the main sources of information. In that context we 
make the following general observations in response to Recommendation 10: while company reporting 
has developed and improved over the last several years, there are significant regional differences in terms 
of comprehensiveness. As our clients are global investors, comparability is of high importance to them 
(and to us). We therefore welcome initiatives that seek to improve company ESG reporting as well as any

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efforts on the international level to harmonize and standardize reporting.  What is most vital from our 
perspective is that information is clear, easy to find, well-structured, timely and comparable across 
reporting years. A key guiding thought for any reporting regulation should be the understanding that the 
ultimate goal is clarity and transparency so that investors can properly integrate material information into 
their investment activities. 
Responding from a preparers’ perspective, DBG has a dedicated sustainability website, with relevant ESG 
information and a dedicated part about ESG ratings and ESG reporting, including our latest and past ESG 
reports. In general, we also support the sharing of the dates of the relevant publications, as well as the 
timelines for which they are expected to be updated or refreshed. Thus, this is not always possible for the 
reporting entities, as the deadlines from some ESG rating agencies vary from year to year and also the 
publication of results do not always follow a standardized timeline. Implementing a dedicated internal 
point of contact to address any requests from or queries to ESG ratings and data products providers is 
from our point of view also a useful measure to streamline the process of answering ESG ratings. This 
measure ensures that ESG-related data are collected and consolidated centrally and that the overall ESG 
strategy is optimal reflected in the respective rating.