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Target Rock Advisors
VALUE PROPOSITION
SUSTAINABILITY & SOCIALLY
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SUSTAINABILITY SCORING
& INDEXING PROCESSES
SUSTAINABLE UTILITY
LEADERS INDEX
FAQ

SCORING METHODOLOGY



The Target Rock sustainability scoring system screens and analyzes the publicly traded U.S. energy and utilities market to score and rank each enterprise’s sustainability performance.

Our scoring process is based on an in depth analysis of actual sustainability-related operating and financial performance over the last decade, with an emphasis on trend and momentum metrics where available and most relevant.

This section describes, at a high level, our screening process and scoring methodology. To discuss in more detail, please contact us. The 2012 results are available here.

Screening Process
The Target Rock sustainability scoring system starts with the entire U.S. energy and utility universe from midstream to pure regulated distribution companies – 196 companies with an aggregate market capitalization of approximately $1 trillion and an average market capitalization of $4.7 billion.

These companies are put through a primary sustainability screening process to identify those that exhibit inherently sustainable/stable business and investment characteristics. The most important consideration at this stage is a company’s business risk profile; each must meet certain regulated versus competitive mix thresholds.

For 2012 this primary sustainability screen resulted in a group of 49 companies with an aggregate market capitalization of $440 billion and an average market capitalization of $9.0 billion. This group comprises Target Rock’s 2012 Sustainable Utility Focus Group.



Scoring Process
We then collect approximately 2.4 million data elements from over 30 independent sources (we do not rely to any significant degree on self-reported data that is not standardized and/or third-party verified).

Each company is analyzed and scored from the bottom up using proprietary algorithms put to over 200 sub-dimensions of data. We publish scores for each company at the three highest levels:

  1. overall Sustainability Score
  2. each of three TBL Elements, and
  3. each of twelve major Dimensions


Scores are weighted based on Target Rock’s knowledge of the issues surrounding the factors and our judgment about their relative importance; our knowledge of the industry; and, in some cases, our knowledge of individual companies and their regulatory environments.



An important aspect of our scoring system is that it is relative, not absolute. That is, scores are based on a company’s performance on a given sustainability measure relative to the performance of the other 48 companies.

Mathematically and for most dimensions that present a fairly diverse spectrum of results, companies are scored on individual sustainability measures using a statistically driven system based on a normal distribution curve.

In some cases where the nature of sustainability measure doesn’t lend itself to such an approach (e.g., where results are more binary, such as in a “yes or no” dimension), we employ case-by-case scoring methods.
  • True TBL approach
  • Uses actual, publicly-available and independently verifiable data
  • No need for executives to fill out lengthy questionnaires
  • Informed, objective results