Moody’s ESG / Credit

Contacts

Brian Cahill
Managing Director – ESG

brian.cahill@moodys.com

James Leaton
Senior Vice President – ESG

james.leaton@moodys.com

Swami Venkataraman
Senior Vice President – ESG

swami.venkat@moodys.com

Interested in learning more about getting rated?

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Four components to MIS integration of ESG

New ESG scores assist in transparently and systematically demonstrate the impact of ESG on credit ratings.

Credit Ratings & Research

How is ESG integrated into credit analysis?

Moody’s credit analysis seeks to incorporate all issues that can materially impact credit quality, including ESG and climate risk; and aims to take the most forward-looking perspective that visibility into these risks and mitigants permits.

Our ESG General Principles Methodology published in January 2019 formalized our approach for incorporating ESG considerations in our ratings. The methodology was updated to explain further our integration of ESG in credit analysis, in particular through our ESG scores.

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ESG factors are taken into consideration for all credit ratings. In our credit rating press releases, we include explanations about whether and how E, S or G is material to a rating action and/or to the rating level. Our issuer, sector and thematic research provides thought-leading insights about the credit impact of ESG.

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ESG Classification

What is ESG?

Our classification reports describe how we define and categorize E, S and G considerations that are material to credit quality. New environmental classification sharpens focus on physical climate risks.

Environmental Classification – Sector Profile: ESG – Global Revised classification of environmental considerations reflects evolving standards

DECEMBER

2020

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Social Classification – Sector In-Depth: Social issues can be material to private issuers' credit quality but are not typically the primary driver

FEBRUARY

2019

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Governance Classification – Sector In-Depth: Governance considerations are a key determinant of credit quality for all issuers

september

2019

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ESG Scores

What is the credit impact of ESG for an issuer?
How is the issuer exposed to ESG risks / benefits?

Our scores provide greater transparency about how we incorporate ESG considerations into credit ratings.

Credit Impact Score (CIS) is an output of the rating process that indicates the extent, if any, to which ESG factors impact the rating of an issuer or transaction.
Issuer Profile Scores (IPS) are issuer-specific scores that assess an entity’s exposure to the categories of risks in the ESG classification from a credit perspective. IPSs, where available, are inputs to credit ratings
We also provide Carbon Transition Assessment (CTA) which provides a consistent and verifiable means to analyze carbon transition risk for rated non-financial companies.

New ESG issuer profile and credit impact scores provide greater transparency on issuers’ exposure to ESG risks and the impact on credit quality.

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Our scores provide greater transparency about how we incorporate ESG considerations into credit ratings. Watch the CIS and IPS video here.

WATCH VIDEO

Framework to assess carbon transition risk for corporate sectors: Our carbon transition risk framework contains four key components that are most relevant to an issuer's ability to successfully manage a shift to a lower-carbon economy.

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Heat Maps

How does ESG materiality vary across sectors?

Heat maps provide relative ranking of various sectors along the E and S classification of risks.

Environmental Risk Heat map: Risks rise for oil & gas, chemicals, metals & mining

MAY

2021

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Social Risk Heat map:
‍Risks rise for coal, oil & gas, tobacco, metals & mining

may

2021

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