KBRA Releases ESG Research – Asset Managers and Investment Funds: KBRA’s Framework for Incorporating ESG Risk Management in Credit Ratings Business WireKBRA Releases ESG Research – Asset Managers and Investment Funds: KBRA’s Framework for Incorporating ESG Risk Management in Credit Ratings Business WireKBRA Releases ESG Research – Asset Managers and Investment Funds: KBRA’s Framework for Incorporating ESG Risk Management in Credit Ratings Business Wire
Impact Investing Forum 2023
London. May 04-05, 2023.
NEW YORK—-(BUSINESS WIRE)-Kroll Bond Rating Agency releases research on how we incorporate environmental, social and governance (ESG), factors in credit rating processes for asset managers and investment fund managers.
The Key Takeaways
Some asset managers and investment funds may be affected by environmental factors. However, their relevance can vary depending upon the nature of the collateral, the structural features and/or qualitative aspects, as well as the transaction. KBRA believes that financial institutions will be better equipped to manage their climate-related risk and reduce it over the long term if they are able to accurately identify and quantify these risks.
KBRA’s evaluation of ESG issues often includes a critical part that involves an analysis of social factors, including stakeholder preferences. KBRA will analyze, where appropriate, how the asset manager incorporates stakeholder preferences in their decision-making process.
The increased interest in ESG investing has brought increased scrutiny to asset manager and investment fund governance frameworks. This includes how ESG factors interact with company operations and/or asset allocation. KBRA’s rating process will continue with an assessment of governance structures, but we will include a specific line inquiry to highlight specific strategies or programs to address ESG problems.
ESG factors can be complex and dynamic. Some are likely to become more relevant for credit over time. KBRA is working to improve our knowledge of these complex topics. We aim to identify and disclose the unique ESG risk exposure of an issuer and its relevance to credit. As we continue to collect data on ESG considerations relevant to our rated universe, we will continue to communicate our findings in our rating, surveillance and research reports.
Click here to see the report
KBRA is a full service credit rating agency that is registered in the U.S.A, the EU, and the UK. It is also designated to provide structured financing ratings in Canada. Investors can use the ratings of KBRA for regulatory capital purposes in multiple jurisdictions.