Welcome to Impact Insides, the podcast series of Astaire Investment Managers.

When discussing about the environmental or social impact of a company may be positive, negative or neutral,

we often hear about impact scores.

Natasha Gerdah, the head of research at Astairea tells us what are impact scores

based on and how are they calculated? Impact scores reflect the ranking of companies with positive

contribution to an impact target such as clean and smart energy,

clean and smart water, decarbonization or pollution reduction.

So this contribution is measured through the revenue share generated by a positive activity

towards these goals.

The impact score is compiled through two metrics. 80% of the score weights come from the

relative revenue share, which emphasis companies with a dedicated business model towards solution

to sustainability challenges. The 20% remaining weight comes from the absolute revenue generation, which captures larger players with a solution at scale.

To take those players into consideration, we need to see a growth trend over the last three years in the contributing business line.

This gives us an insight about the strategic development of the company in the right direction.

So the score is updated at each corporate reporting release,

which is usually once a year and gives us an ongoing assessment of a company's eligibility in our investable universe.

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