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Our sub-sovereign physical climate risk data shows that local authorities and companies in semiconductor manufacturing hubs will need to prepare for increasing climate risks to ensure the long-term viability of investments.
Each region comes from a very different starting point in the path toward net-zero emissions, driven by economic structures, level of development and policy choices.
An increasing policy focus on introducing carbon pricing marks an important step toward emissions reduction.
The IPCC’s sixth assessment report utilizes the latest climate model data and analytical techniques. In this post, we explore the key advancements made and the implications for our climate risk assessments.
Widespread drought conditions in 2021 point to the increasing credit challenge that water stress will pose for both the public and private sector in Mexico.
Unlocking hydrogen's potential as a fuel for the power sector will require lower costs, refurbishment of existing infrastructure and the creation of markets and hubs.
We reviewed nearly 5,600 credit rating action announcements that we published in 2020, finding that the frequency of ESG considerations increased significantly from the prior year.
Weak water management constrains credit quality primarily through a government's economic strength, but can also increase susceptibility to event risk and social risk.
We now expect sustainable bond issuance to reach $850 billion in 2021, with about $450 billion of green bonds and $200 billion each of social bonds and sustainability bonds.
Internal controls failures, climate change, executive remuneration, biodiversity loss and the post-pandemic response to human capital risks are shaping the operations in the banking sector according to our sector analysis.
The median carbon transition assessment (CTA) score for power generation of 41 European electric utilities is CT-6, indicating moderate positioning.
Our data shows that large swathes of the US west will be at risk of wildfires, heat stress and water stress over the coming two decades, meaning that preparation for this new normal has become essential.
Despite the material risks associated with PFAS controversies, most companies’ overall responsiveness is ‘non-communicative’. However, we expect rapid and effective changes from PFAS manufacturers and users as they adapt to increased scrutiny from stakeholders and comply with upcoming regulatory frameworks.
Many sovereigns have begun to take measures to increase climate resiliency, but fiscal and institutional constraints may slow adaptation efforts.
Moody’s ESG Score Predictor generates real-time, predicted ESG scores for millions of public and private small- and medium-sized enterprises (SMEs) worldwide. Featuring case study examples, this white paper demonstrates how the ESG Score Predictor can help customers achieve full portfolio coverage.
The European Commission unveiled the Renewed EU Sustainable Finance Strategy which sets out its approach to addressing ongoing and emerging challenges that will support the EU Green Deal and an inclusive and sustainable recovery from the COVID-19 pandemic.
Financial institutions around the world have faced many challenges over the past year, from the health and operational impacts of the global COVID-19 crisis, to residual financial shocks across numerous industry sectors and the broader economy.
Replay Moody’s ESG in Credit: Social Risk Summit, which was held on June 28 - 30, 2021. Industry leaders and Moody’s analysts engaged in discussions about social risk impact on credit ratings, regulatory response and investment strategies.
Climate change, biodiversity loss, COVID-19 and protests against inequality are shifting the landscape for investors at an unprecedented rate.
Given the scale of these challenges and the limited fiscal flexibility of emerging market RLGs, social considerations will continue to weigh on credit profiles for many years.
Biodiversity risks are rising up the agenda for companies, investors and policymakers, with increasing recognition of the importance of nature for economic and investment decision-making and corporate reporting.
The credit impact of biodiversity and natural capital consideration straddles environmental and social issues across different rating groups.
Companies that fail to demonstrate sufficiently robust governance structures and policy measures to mitigate their impact on marine biodiversity will come under greater scrutiny, raising potential reputational and financial risks.
We leveraged our database of 5,000 global companies and their underlying 2 million global corporate facilities scored on their forward-looking exposure to climate hazards to provide a view on relative risk exposure by industry.
According to our findings, the three sectors most impacted by biodiversity-related controversies are Mining & Metals, Food and Energy. We expect companies’ response to such controversies to improve as biodiversity risk management moves up the investor and regulatory agenda
Global momentum and domestic initiatives behind reducing carbon dioxide emissions to net zero by midcentury will have credit implications for Chinese entities across sectors.
38% of businesses have at least one facility associated with habitat loss, based on our sample of 5,300 large, publicly traded global companies. This report outlines a framework for assessing biodiversity risk, which can provide a foundation from which to understand the biodiversity risks of companies in investment and lending portfolios.
This webinar explains the Moody’s Analytics approach to quantifying chronic physical risk at the country level using a variety of impact channels. We also elaborate on how we calibrate the Moody’s Global Macroeconomic Model to account for transition risk and its impact on projections of unemployment rates and house prices. Finally, we provide details regarding our approach to market risk.
Manufacturing stands out as a key part of President Biden’s America Jobs Plan and there is wide support for strengthening American manufacturing.
On-demand panel discussion where Moody’s ESG specialists will discuss the latest trends shaping global sustainable debt markets and take a closer look at sustainability-linked bonds.
Recognised market standards, ambitious corporate agendas and strong investor demand provide fertile ground for rapid growth of the sustainability-linked bond (SLB) market.
In April 2021 the European Parliament approved a European Defence Fund (EDF) worth EUR 7.9 billion over seven years (2021-2027). This #5MinuteRead considers whether the EDF could be used to fund the development of so-called controversial weapons and assesses the potential implications of the EDF for Europe’s defence industry.
Strong growth in green, social and sustainability bond issuance continues in the first quarter. Issuers continue to heighten their focus on sustainability-linked bonds and loans, and a focus on gender equality spurs dedicated bond issuance.
Discussing how central banks are incorporating climate stress testing, key building blocks for climate stress testing, and different types of scenarios needed for assessing climate risk.
This report elaborates on our physical climate risk scores, part of our sovereign ESG scores, providing further analysis about the materiality of climate change for sovereigns.
The recent proliferation of net-zero targets among governments and the financial sector – and increasing focus on disclosure around the risks of climate change – is expected to raise credit risk and reduce the availability, and increase the cost, of capital for carbon-intensive activities.
The mortgages that back European RMBS we rate are subject to risks associated with three main types of climate disasters: floods, heat stress and water stress.
A compilation of ESG-related research from Q1 2021 across Moody's Investors Service.
Data show that sectors employing a higher share of women and with more widespread reporting on gender diversity have typically experienced fewer gender-related controversies since the start of 2020.
Banks in the Commonwealth of Independent States (CIS) face social risks from four key factors, three of which stem from demographic and societal trends that pose greater risks for CIS banks than the global average.
Global bond and loan issuance linked exclusively to the economic empowerment of women or addressing female underrepresentation in board rooms and corporate suites exceeds $9 billion to date and is likely to continue growing.
The COVID-19 crisis, with its mandated business closures and social distancing measures, has slammed female-dominated industries such as hospitality, healthcare, personal services and government much harder than have previous downturns. Prolonged school closures and childcare concerns are further intensifying the negative outcomes for women.
The coronavirus pandemic has stalled gains in female labour force participation across advanced economies, with implications for both economic and fiscal strength.
The loss of women’s income will constrain income and consumption tax revenues for states and local governments, while denting women’s enrollment in higher education. If women have difficulty reentering the workforce, they will have more trouble paying mortgages and rent, a negative for the housing sector.
The Climate-Adjusted EDF™ (Expected Default Frequency) framework offers a consistent, transparent, and customizable way to analyze physical and transition risk’s effect on public companies’ credit risk.
The pace of investment in vehicles that run on alternative fuels is accelerating as countries adopt more stringent emissions regulations and more consumers are opting to buy cleaner cars.
The slowdown of the Nuclear Renaissance has seen some countries re-evaluate their use of nuclear power, whilst others have brought new projects onstream. In this #5MinuteRead, we consider subsequent and possible future developments in the industry.
The spread of the coronavirus has placed signiﬁcant stress on the global economy but corporate downgrades reveal a thorough and measured approach to credit during turbulent times.
Use-of-proceeds sustainable bond issuance forecast to increase by 30% from 2020. A combination of strong investor demand, policy measures and standardisation of regulations will drive further growth.
Many emerging market governments’ policy responses to COVID-19 include policies to promote women's economic and social security, but countercyclical recovery policies alone will not be enough to address long-standing, structural gaps in women’s access to education, employment and finance.
COVID-19 has heightened awareness of gender gaps around the world. Government and company actions to promote gender equity in employment, income and access to finance will have far-reaching economic and social benefits.
Gender lens investing, an investment strategy that seeks to address gender disparities, continues to gain prominence. This strategy can be implemented through mechanisms such as gender bonds and private equity funds focused on the empowerment of women in business.
Our climate risk forecasts for the US and UK build off our well-tested Global Macroeconomic Model and are consistent with NGFS climate scenarios
This empirical study quantifies corporate valuation and credit impacts of climate-related hazard events, finding statistically and economically significant negative impacts of hazard events on the subsequent valuation of affected firms.
This report analyzes sovereign exposure to floods, heat stress, hurricanes and typhoons, sea level rise, water stress and wildfires based on the only known global dataset matching physical climate risk exposure to locations of population, GDP (Purchasing Power Parity) and agricultural areas within countries.
This analysis uses the TCFD Climate Strategy Assessment dataset from Moody's affiliate V.E to explore how US firms stand against policy recommendations outlined in recent reports by the US Commodity and Futures Trading Commission (CFTC) and the Business Roundtable (BRT) and assesses how disclosure in the US compares to reporting in other markets.
In this research paper, we showcase the solution that V.E has developed for investors to help them in measuring EU Taxonomy Alignment.
Energy transition will affect how demand for oil and gas evolves over the next 10-20 years and will require continuous large investment amid rising risks.
In this research paper, we examine where companies stand today in terms of adopting the TCFD recommendations. Our research indicates that most companies still lag behind in terms of disclosures.
This webinar aims to discuss the impacts of Covid-19 on companies’ Energy Transition (ET) commitment, and how the pandemic has encouraged companies to reassess the resilience of their Energy Transition.
During this webinar, we will discuss how sustainable finance has emerged as a vital tool for companies allowing them to navigate risks and align financing and sustainability objectives.
We provide an update in this paper on the worst affected property types and geographic markets—and offer our thoughts on how conditions in the CRE debt markets will likely evolve through the rest of the year.
Four Twenty Seven developed a first-of-its-kind global dataset projecting changes to wildfire potential under a changing climate, at a granularity of about 25 x25 kilometers.
A staggering nearly one-third of American workers have taken a direct financial hit from the COVID-19 pandemic, either through a lost job, lost hours, or a pay cut.
The relationship between race and climate change is too often ignored. The recent protests for racial justice and police reform call attention to the fact that racism is still deeply embedded in our institutions and public policies.
Seatbelts fastened for turbulent multi-year recovery.
The C-19 Dataset can be used as a lens to view the extent to which a company is fundamentally prepared to manage the risks and opportunities that the pandemic presents over the medium and long term.
Of the 7,637 rating actions that we published last year for private-sector issuers, 33% contained references to material ESG considerations, underscoring the signiﬁcance of these considerations in our credit analysis.
The report explores which physical impacts are already locked in, identifies how Representative Concentration Pathway (RCP) scenarios apply, and describes an approach to setting up scenario analysis for near-term physical climate risks.