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This methodology sets out how Integrum ESG benchmarks every company against its peers using heatstrips. For every ESG and impact metric and sub-metric, two heatstrips show where a company’s Awareness and Performance scores sit within the full distribution of its peers’ scores, so its relative position can be read at a glance alongside its absolute score.
Overview
What a heatstrip shows
Every material metric is scored on a 0 to 4 scale for Awareness, how well a company recognises and manages an issue, and for Performance, how its reported results compare with its peers. A score on its own shows where a company stands in absolute terms. A heatstrip adds the relative view: it shows how every peer company scored on the same measure, so a user can see whether a score of 2 is typical, unusually strong or unusually weak among its peers.
Each heatstrip is a horizontal bar divided into five coloured bands, one for each score from 0 (red) to 4 (dark green). The width of each band represents the number of peers with that score, and hovering over the heatstrip shows the exact number of companies in each band. The company’s own score is shown beside it.
Heatstrips appear for every ESG and impact metric and sub-metric on each company page of the Integrum ESG Platform, with the Awareness heatstrip on the left and the Performance heatstrip on the right.
Levels
Metric and sub-metric heatstrips
| Level | What the heatstrip compares |
|---|---|
| Metric | The company’s Awareness or Performance score against every score of its peers, across all the sub-metrics for that issue |
| Sub-metric | The company’s Awareness or Performance score on that sub-metric against its peers’ scores on the same sub-metric |
A metric-level heatstrip pools every peer score across the issue’s sub-metrics, so it shows how the peer group performs on the issue as a whole. Sub-metric heatstrips show the detail behind it.
Peer groups
The peer group depends on the type of metric:
| Metrics | Compared against |
|---|---|
| Sustainability (IFRS S1) and Climate Risk (IFRS S2) | Companies in the same subsector worldwide, because the issues material to a company and the levels of performance that are achievable depend on its business |
| Impact, Governance and EDCI | Companies globally, because these measures apply in the same way to every company, whatever its sector |
Awareness
Awareness heatstrips
Each company receives an absolute Awareness score, based on what it discloses about its policies, targets and management of the issue. Because the scores are absolute, any number of peers can share the same score, so the bands can have very different widths. A wide band at 3 or 4 shows that strong practice is common among peers; a wide band at 0 or 1 shows that most peers have yet to address the issue.
Performance
Performance heatstrips
For Performance, the reported values of peer companies, such as emissions intensity or employee turnover, are ranked into quartiles, which translate into scores from 1 to 4, amber to green. A company in the top quartile of its peers scores 4.
Where a company does not disclose a performance value, it scores 0. This is why the red band of a Performance heatstrip is often wider than the others: it shows how many peers do not report the figure, while the four quartile bands are roughly equal in size. The heatstrip therefore shows both how a company performs against peers that disclose and how common disclosure is among its peers.
Worked examples
Worked examples
An Awareness heatstrip
| Awareness score | Peer companies |
|---|---|
| 0 | 25 |
| 1 | 5 |
| 2 | 40 |
| 3 | 33 |
| 4 | 1 |
| Total | 104 |
A company scoring 3 scores higher than 70 of its 104 peers, and only one peer scores higher. The wide band at 2 shows that the largest group of peers manages the issue to a moderate standard.
A Performance heatstrip
| Performance score | Peer companies |
|---|---|
| 0 (not disclosed) | 30 |
| 1 (bottom quartile) | 7 |
| 2 | 6 |
| 3 | 6 |
| 4 (top quartile) | 7 |
| Total | 56 |
Of 56 peers, 30 do not disclose the metric and score 0. The 26 that disclose are split into four near-equal quartiles. A company that discloses and sits in the top quartile scores 4; a company that does not disclose scores 0, alongside the 30 peers that also do not.
Interpretation
Reading the two heatstrips together
High Awareness, low Performance
The company has policies and targets in place, but its reported results lag its peers. A prompt to check whether its targets are delivering.
Low Awareness, high Performance
The company performs well against peers but discloses little about how it manages the issue. A prompt to ask how the result is sustained.
Wide red Performance band
Disclosure of the metric is weak across the peer group, so any company that reports stands out.
Narrow spread of scores
Peers manage the issue in similar ways, so small score differences carry more weight.
Every score behind a heatstrip has a Glass Box, showing why the company has that score and the disclosure it is based on, as set out in our Company ESG Scores and Glass Box Methodology. Our Glass Box summary of Netflix shows peer benchmarking in practice: Netflix’s rise in Scope 1 and 2 emissions was the fifth largest among the Internet Media and Services companies we cover. For benchmarking funds and portfolios against market benchmarks, see our Fund ESG Ratings Methodology.
FAQs
Frequently asked questions
What is an ESG heatstrip?
A heatstrip is a coloured bar showing how a company’s score on an ESG or impact metric compares with every score of its peers: companies in the same subsector worldwide for Sustainability and Climate Risk metrics, and companies globally for Impact, Governance and EDCI metrics. Each band represents a score from 0 to 4, and its width represents the number of peers with that score.
What is the difference between the Awareness and Performance heatstrips?
Awareness scores are absolute, so band widths vary with how many peers reach each score. Performance scores rank peers’ reported values into quartiles, scored 1 to 4, with 0 for companies that do not disclose.
Why is the red band often the widest on a Performance heatstrip?
Companies that do not disclose a performance value score 0, so the red band shows how many peers do not report the metric. The four quartile bands of disclosing companies are roughly equal in size.
What does a metric-level heatstrip compare?
It compares the company’s score with every score of its peers across all the sub-metrics for that issue. A sub-metric heatstrip compares the company with its peers on that sub-metric alone.
Who are a company’s peers in a heatstrip?
For Sustainability (IFRS S1) and Climate Risk (IFRS S2) metrics, companies in the same subsector worldwide. For Impact, Governance and EDCI metrics, companies globally.
Can I see how many companies are in each band?
Yes. Hovering over any heatstrip shows the number of peer companies with each score.
Do heatstrips cover impact metrics?
Yes. Heatstrips appear for every ESG and impact metric and sub-metric.
Benchmark your holdings against their peers
Speak to our team to see how the companies you hold compare with their sector peers on every material metric.