TRANSPARENCY MATTERS

ESG In Credit Ratings

We recognize an increasing desire for more information and clarity regarding how environmental, social, and governance (ESG) characteristics are factored into our credit ratings.

ESG In Credit Ratings Q3 2024: Negative Actions Outweigh Positive By Four To One

There were 36 rating actions related to environmental, social, and governance (ESG) factors in the third quarter, with negative actions materially outweighing positive ones by four to one. Governance factors remained the primary driver in the quarter, representing 89% of ESG-related rating actions. Risk management, culture, and oversight was also still the main underlying factor with 17 actions. U.S. public finance continued to be the sector with the most ESG-related rating actions, although decreasing to 21 from 24 in the second quarter for a year-to-date total of 66 (or 58% of ESG-related rating activity for all practices this year).

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How do we incorporate ESG into our credit ratings?

We incorporate ESG factors into our credit ratings when we believe they are material to creditworthiness and sufficiently visible. The spectrum of risks now commonly referred to as "ESG" have long been a part of our credit rating analyses using our sector-specific criteria.

View S&P Global Ratings Update on ESG Credit Indicators >

Environmental, Social, And Governance Principles In Credit Ratings

Here we articulate the principles that S&P Global Ratings applies to incorporate environmental, social, and governance (ESG) credit factors into our credit ratings analysis. Within the criteria we define ESG credit factors as those ESG factors that can materially influence the creditworthiness of a rated entity or issue and for which we have sufficient visibility and certainty to include in our credit rating analysis.

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ESG Credit Factors: A Deeper Dive

Here we provide descriptions of key environmental, social, and governance (ESG) factors that have affected creditworthiness or may influence future creditworthiness.

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ESG In Credit Ratings