What are ESG framework - Part 3

What are ESG framework - Part 3

Rating agencies

Rating agencies require responses to all questions in the framework and typically have a scoring element.

ENERGY STAR®

ENERGY STAR® (link resides outside ibm.com) is a nationally recognized energy rating and benchmarking mechanism in North America that covers commercial buildings across a diverse group of building use types.

How ENERGY STAR® works

ENERGY STAR® is a US Environmental Protection Agency (EPA) voluntary program that helps businesses and individuals save money and protect the climate through superior energy efficiency. Rankings compare the performance of a building against other similar buildings, called a peer group. Building owners can benchmark their performance internally across their portfolio and externally among similar sectors.

ENERGY STAR® scores are based on data from national building energy consumption surveys, which allows the ENERGY STAR® Portfolio Manager tool to control for key variables affecting a building’s energy performance, including climate, hours of operation and building size. This means that buildings from around the country—with different operating parameters and subject to different weather patterns—can be compared side by side to see how they stack up in terms of energy performance. The specific factors that are included in this normalization (hours, workers, climate and more) will depend on the property type. The 1–100 scale is set so that 1 represents the worst-performing buildings and 100 represents the best-performing buildings, with 50 representing the average.

Dow Jones Sustainability Indices (DJSI) and the Corporate Sustainability Assessment (CSA) questionnaire

The DJSI tracks the performance (link resides outside ibm.com) of the world’s leading companies in terms of economic, environmental and social criteria. It is used by investors who want to jointly assess financial and ESG aspects of company performance.

How DJSI works

The DJSI applies a clear, rules-based component selection process based on the company’s Total Sustainability Scores resulting from the annual CSA. The CSA compares companies across 61 industries with questionnaires that assess a mix of 80–100 cross-industry and industry-specific questions. Companies receive scores ranging from 0 to 100 and percentile rankings for approximately 20 financially relevant sustainability criteria across economic, environmental and social dimensions. Only the top-ranked companies within each industry are selected for inclusion in the DJSI family. Investors in these indices gain exposure to the performance potential of well-known common factors, such as low volatility, dividend yield, value or momentum, while avoiding ESG-related risks in their portfolios by directing their investment toward more sustainable companies.

National Built Environment Ratings Scheme (NABERS) AU

Using a six-star scale, NABERS helps Australian building owners understand how their asset impacts the environment. They also help prospective tenants understand how energy-efficient their leased space is.

How NABERS works

NABERS compares the performance of a building or tenancy to benchmarks that represent the performance of other similar buildings in the same location. An independent assessor calculates NABERS scores by using 12 months of real, measurable information about a building or tenancy, such as energy and water bills or waste consumption data, as the basis of their rating. NABERS ratings are available for commercial office buildings, tenancies, hotels, shopping centers and data centers. NABERS announced in 2019 a plan to expand to all major building types. Under Australia’s Building Energy Efficiency Disclosure Act, all buildings for sale or under lease over 10,000 sq ft must receive a NABERS rating. Governments are required to lease space in buildings with ratings of 4.5 or higher.


IBM Envizi ESG Suite is SaaS that consolidates enterprise ESG data for analysis and reporting. Envizi simplify the capture, consolidation, management, analysis and reporting of your environmental, social and governance (ESG) data.

For more information about IBM Envizi Solution, please contact EGP - IBM's partner in Vietnam - here.

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