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Technology & Data

New Index Tracks US Cyber Risk Exposure

ISS ESG, the sustainable investment arm of Institutional Shareholder Services (ISS), has developed the ISS ESG US Cyber Risk Index to support investors in identifying and tracking companies with “low or negligible cyber-related risks” based on their ISS ESG Cyber Risk Score. The score signals the likelihood of an organisation suffering a material cybersecurity incident over a 12-month period, with ISS ESG considering global risk indicators that reflect a company’s cybersecurity risk behaviours. The solution also uses machine learning technology to identify pattens and signatures that are indicative of potential breach events. The index will only hold issuers with a rating of ‘low’ to ‘negligible’ risk and will be market cap weighted and rebalanced every quarter. Hernando Cortina, Head of Index Strategy at ISS ESG, said: “The cost of corporate cyber breaches can run in the hundreds of millions of dollars per incident. For investors, the launch of ISS ESG’s US Cyber Risk Index provides an investable tool to screen for companies with low or negligible expected relative exposure to cyber breaches within the next 12 months. [It] is the latest example of ISS ESG’s innovative and differentiated index offerings, drawing on our evolving range of sustainability ratings and research, and high-quality data.” 

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