Rating Agencies Focus on ESG Concerns | Mintz – JDSupra – JD Supra

Rating Agencies Focus on ESG Concerns | Mintz – JDSupra JD SupraRead More

Fitch Ratings launched a new ESG rating system last week. It is designed to use a clear methodolog[y]” of an “full assessment ESG performance” that allows for “detail comparability.” This announcement builds upon previous work Fitch has done over the past few years, including the 2019 launch of Fitch Ratings ESG Relevance scores, which shows the impact of ESG elements on credit rating decisions. Fitch is not alone in measuring ESG factors; both of the other major ratings agencies–Moody’s and S&P–have also launched products focusing on ESG issues (https://esg.moodys.io/; https://www.spglobal.com/esg/scores/). The increasing importance of ESG by major rating agencies highlights its increasing salience to investors and the general public, not just activists and government regulators. It is likely that the SEC and other government agencies have begun to examine ESG concerns raised by commercial entities. Companies should consider what information the market is asking when considering how to respond to disclosure requirements set forth by government regulators. This renewed focus on ESG concerns is not likely to change in the near future. Fitch Group today launched Sustainable Fitch, which will offer a comprehensive array of ESG Ratings products at the entity and instrument levels for all asset classes worldwide. ESG Ratings coverage initially will be limited to the ESG-labelled market but will eventually cover the entire fixed-income investable universe. Sustainable Fitch believes it can offer the most comprehensive coverage from one provider in the ESG market. Sustainable Fitch’s new ESG Ratings assess the ESG performance of entities and instruments. They are backed with clear methodologies and source data derived from the same trusted platforms and principles that underpin Fitch credit rating. They allow for detailed comparability by providing an objective assessment of ESG performance at Entity and Instrument levels. https://www.fitchratings.com/research/banks/fitch-group-announces-creation-of-sustainable-fitch-launches-esg-ratings-products-15-09-2021 [View source.]