ISS expands portfolio risk analytics with governance, cyber and EVA scoring tools

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ISS adds governance, cyber scoring

Highlights

ISS introduces Governance QualityScore, Cyber Risk Score, and EVA to provide investors with concise, factor-based risk and performance analytics at the company level.
Cyber Risk Score leverages machine learning to rate breach likelihood on a 300-850 scale, with weekly updates forecasting potential material cyber incidents within 12 months.
EVA covers 28,000 companies worldwide, enabling cross-industry profitability comparisons and supporting forward-looking analysis for identifying alpha and risk exposures.

Scoring tools target portfolio oversight

As reported by ISS STOXX, citing ISS, the company offers Governance QualityScore, Cyber Risk Score and Economic Value Added, or EVA, as tools designed to give investors a quicker view of company-specific risks and performance factors.

The governance product is built to reduce time spent reviewing public filings by summarizing a company’s practices across audit and risk oversight, board structure, compensation and shareholder rights. ISS says the tool is grounded in factor-level data and historical context, allowing users to track how governance practices evolve over time and apply the information to stock selection, engagement screening, policy development and proxy voting decisions.

The cyber product uses machine learning to assess the potential for a breach event and converts that assessment into a score ranging from 300 to 850. ISS says the metric estimates the likelihood that an organization will face a material cyber incident within the next 12 months, with weekly updates based on findings from the previous week.

Investment and market implications

EVA adds a corporate performance lens based on underlying economic profit rather than accounting profit alone. ISS says it applies the metric to 28,000 companies globally, giving investors a way to compare businesses across industries and countries while filtering for ideas that may outperform a benchmark.

The firm presents EVA as a tool for examining overall profitability as well as management decisions that drive value creation. It also highlights forward-looking EVA measures as a way for portfolio managers to gauge exposure to value-creating or value-eroding companies and identify active positions that could point to alpha opportunities or risk.

Together, the three offerings reflect rising demand for analytical products that combine historical data, predictive modeling and governance assessment in a single investment workflow. For asset managers and institutional investors, that can broaden the set of inputs used in portfolio construction, stewardship and risk monitoring.

As we noted earlier, a Weiss Ratings screen of low-debt stocks highlighted names outperforming the S&P 500.

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