Moody’s updated Environmental, Social and Governance (ESG) Cross Sector Methodology introduces ESG Issuer Profile and Credit Impact Scores for issuers and transactions across public finance and other Moody's rated sectors.
In this session, Moody’s analysts will review the approach to the new ESG Issuer Profile and Credit Impact Scores and provide some key highlights from its analysis about the impact of ESG on credit.
- How do the scores enhance integration of ESG considerations into credit ratings?
- Which case studies exemplify each end of the 1-5 scale?
- What underlying data sources were used in the methodology?
- Important Details about the New Scores
Issuer Profile Scores (IPS) are separate environmental, social and governance scores that assess an entity’s exposure to the categories of ESG that MIS regards as the most material to credit. The assessment of the exposure to E, S and G risks or benefits is based on the general ESG principles described in the methodology, and the scores provide a consistent way to express this assessment.
ESG Credit Impact Scores (CIS) reflect the impact of ESG considerations on the rating of an issuer or transaction. Whereas the E, S and G profile scores are based on an issuer’s or transaction’s outright exposure to ESG risks or benefits and ESG specific mitigants, the CIS places ESG considerations in the context of the issuer’s other credit drivers that are material to a given rating.
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