New industry evaluation provides greater transparency on environmental, social, and governance issues
NEW YORK, June 17, 2019 /PRNewswire/ -- S&P Global Ratings announced today that it published its first ESG Evaluation, a new assessment of how environmental, social, and governance (ESG) factors could affect an entity's long term sustainability.
The ESG Evaluation provides a cross-sector, forward looking, qualitative, and data-driven opinion of an entity's ESG performance and preparedness for future risks and opportunities that builds upon company engagement and S&P's analysts' expertise and objectivity. It is a separate analysis from the credit rating.
"In today's world of engaged communities, consumers, regulators, employees and active social media, insight into an entity's ability to effectively manage potential ESG risks, disruptions and opportunities is increasingly important to understanding whether a company will be successful in the long term," said Susan Gray, Global Head of Corporate & Infrastructure Ratings, S&P Global Ratings. "Our ESG Evaluation speaks to the evolving view of ESG as a critical contributor to medium and long-term value creation for companies."
Our inaugural ESG Evaluation analyzes NextEra Energy Inc., an American energy company headquartered in Florida. You can see the evaluation here: https://www.spglobal.com/_assets/documents/ratings/esg-evaluations/nextera-energy-inc.pdf
"Transparency into entities' ESG performance and preparedness is key to facilitating long term, sustainable growth," said John Berisford, president of S&P Global Ratings. "Our analysts have always incorporated relevant ESG factors, where they view them as material, into the qualitative considerations and forecasts within our credit ratings. Today, alongside our ratings, we have completed our first ESG Evaluation, a new industry assessment that is built on S&P Global's strong knowledge base of assessing the impact of ESG factors, to aid investors as they seek more efficient and responsible allocation of capital."
The Analytic Approach for the ESG Evaluation, introduced in April 2019, draws on insights from S&P Global Ratings' network of credit analysts, and data and information from S&P Global Market Intelligence and Trucost, S&P Global ESG Analysis, as well as public bodies and non-governmental organizations such as the U.N. Principles for Responsible Investment and the Carbon Disclosure Project. Importantly, it also captures information on risk mitigation and strategy gained from face-to-face meetings with an entity's senior management to produce a final ESG Evaluation score and report.
S&P Global Ratings also leverages analysis from the ESG Risk Atlas to provide a sectorial and regional foundation for its ESG Evaluation. The ESG Risk Atlas provides a relative ranking of industries in terms of exposure to environmental and social risks and opportunities. The sector risk atlas charts combine each sector's exposure to environmental and social risks, scoring it on a scale of 1 (low exposure) to 6 (high exposure). In addition to informing the ESG Evaluation, the ESG Risk Atlas is the basis of S&P Global Ratings' ESG Industry Reports which expand further on the Risk Atlas analysis by sector:
For more detail, see "Environmental, Social, And Governance Evaluation Analytical Approach" and "FAQ: How We Apply Our ESG Evaluation Analytical Approach."
To learn more about the ESG Evaluation and S&P Global Ratings' wider ESG-related work, please visit: https://www.spglobal.com/en/capabilities/esg-evaluation
This report does not constitute a rating action.
About S&P Global Ratings
S&P Global Ratings, part of S&P Global Inc. (SPGI), is the world's leading provider of independent credit risk research. We publish more than a million credit ratings on debt issued by sovereign, municipal, corporate and financial sector entities. With over 1,400 credit analysts in 26 countries, and more than 150 years' experience of assessing credit risk, we offer a unique combination of global coverage and local insight. Our research and opinions about relative credit risk provide market participants with information that helps to support the growth of transparent, liquid debt markets worldwide.
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