In the SBTI-finance-tool to apply the temperature scoring method on financial sector, it is recommended to use the ISIN as the company ID , however I figured out that the ISIN is not a company unique identifier , as an ISIN is rather a financial asset identifier , and most companies have several ISIN .
So in my project, I am using the company_name as the company_id .
As ISIN is referenced in you documentation many times, I just wanted to make sure I had nothing wrong…
Thanks !
Welcome to the community @dcoulomb,
You are absolutely correct that ISIN is probably not the best company identifier, as it is mainly a security identifier, unique on a security level. It is especially tricky for fixed income securities where companies may have multiple ISINs in issue at the same time and as these instruments by design more often than not are not perpetual the fixed income ISINs will expire.
The reason we reference ISINs is that SBTi has used ISINs as one way to identify companies in the Companies Taking Action (CTA) table/Excel-file for several years, long before the SBTi Finance Tool was developed.
There are a couple of areas where the tool uses the ISIN to identify companies in the tool; to calculate the portfolio coverage and to match certain companies to certain industry scenarios.
I would not recommend using ISINs as your primary company identifier though. Neither would I recommend using the company name, as you easily run in to problems with different spellings, etc. However, you can use whatever identifier you want in the company_id field, e.g. a corporate ticker from your data provider, as long as they match in the fundamentals, portfolio and targets data.
We have started to collect LEI (legal identity identifier) along side ISINs from new companies submitting targets and commitments, as this is a unique identifier for each legal entity, and also has the benefit that it is easier to map corporate relationships, making value chain analysis easier. We are in the process of adding LEI to the CTA and to backfill existing database with LEI, to improve mapping of both listed and unlisted companies across all asset classes. Most data providers should also be able to provide LEI, making matching companies’ fundamentals, portfolio data and targets easier.