R-Factor™ - A Roadmap to Build Sustainable Companies
State Street Global Advisors’ R-Factor™ ESG score supports the development of more sustainable capital markets.
What is R-Factor™?
Responsible investing requires a tool to measure the performance of a company's business operations and governance as it relates to financially material ESG challenges facing the company's industry. We refer to this scoring mechanism as the Responsibility Factor, or R-Factor™.
R-Factor™ scores draw on multiple data sources and leverage widely accepted, transparent materiality frameworks from the Sustainability Accounting Standards Board (SASB) and corporate governance codes to generate a unique ESG score for listed companies.
How R-Factor™ Builds Sustainable Companies
R-Factor™ is the first ESG scoring system that offers companies a roadmap on how to manage and disclose their ESG practices, allowing them to take the action needed to enhance their scores. It is built to address the current challenges with ESG data by removing opaqueness around ESG materiality in the scoring process.
Put simply, it takes the guesswork out of ESG reporting, and focuses boards and management teams on the core ESG issues that matter for business and investors. Small, mid-cap, and emerging market companies stand to particularly benefit from R-Factor™because of its focused approach.
The world of ESG disclosure may seem complex – but with R-Factor™, companies and investors no longer have to go it alone. Together, we can forge a new standard in ESG investing.
Companies interested in receiving their R-Factor™ scores should submit an email request to firstname.lastname@example.org including the following information:
Company’s legal name
Company’s headquarter location
Contact’s Title at Company
Contact email address (must be an official company email address)
(Please note that R-Factor™ scores will be provided only to employees affiliated with a company’s Investor Relations, Chief Financial Officer, ESG/Sustainability Leadership or General Secretary’s organizations. Please include attestation in your email stating that you are affiliated with one of these functions.)
Scores are provided within two weeks of submission and include disclosure about your company’s score relative to regional and global peers, as well as frequently asked questions.
Guidance on Next Steps After Receiving Your Score
We encourage you to explore the publicly available frameworks of the Sustainability Accounting Standards Board (SASB) and your region’s corporate governance code to understand investors’ expectations around the management of financially material ESG issues facing your industry and region. We have also provided responses to frequently asked questions about R-Factor.
You may also wish to review SASB’s implementation primer, a reference document for companies that have chosen to integrate SASB standards into their core communications with investors. The implementation primer is available here: https://www.sasb.org/implementation-primer/
Corporate governance codes are made publicly available by the relevant regulator / investor network
This information is for informational purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.
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