To create HIP Ratings for Impact Entities, we use a systematic, data driven approach.

Step 1: Identifying Reliable and Material Data

HIP investor seeks out best available data sources and works within each sector to improve the framework over time. This iterative refinement requires a sector-specific experienced understanding of nuanced data. Our criteria are that data sources:

  1. Are reliable and verifiable
  2. Are material to the entities goals, impact, and scope of influence
  3. Have high coverage for bond issuers

Step 2: Create A Sector-Specific Scorecard

HIP Investor then creates a sector specific scorecard to capture the impact each issuing entity has on society and the environment, across the five HIP Pillars.

Step 3: Create Issuance Level Ratings

HIP reviews bond issuance official statements to assign an impact entity rating along with issuance specific use of proceeds analysis. Specified environmental or energy efficiency use of proceeds can receive a rating enhancement, while alternative use of proceeds, such as funding the construction of prisons or stadium arenas, can be excluded. This analysis is currently being used by fund managers and investment advisers in portfolio construction.

New Issuances
Several HIP Clients are requesting HIP issuance level ratings from preliminary official statement review. HIP reviews the upcoming issuances every week and returns ratings prior to the pricing date. This analysis is then being used by portfolio managers to decide which securities to purchase at initial offering to the market.

Maps to other frameworks
In addition to these data and ratings products offered by HIP Investor, we have maps available to map HIP’s framework to other popular frameworks, such as the UN SDGs.