Fitch Launches ESG Ratings for Labelled Bonds Covering ESG Performance, Impact & Outcomes
Fitch Group’s sustainability-focused analytics business Sustainable Fitch announced today the launch of ESG Ratings, Data & Analysis, a new ESG ratings product for investors providing sustainability scores and analysis at the entity, framework and instrument level.
The announcement follows the launch last year of Sustainable Fitch, along with its initial ESG ratings products targeting fixed income investment products. According to Sustainable Fitch Managing Director Andrew Steel, the new ratings are being launched amid client demand for “ESG ratings that go beyond financial materiality to include analysis of ESG performance, impact, and outcomes.”
According to the company, the new ESG ratings product aims to allow investors to distinguish between ESG impact, outcome and performance at a detailed individual factor level, along with the capability to entities and debt issuances within sectors and across different sectors and asset classes.
The product includes Entity Ratings, which evaluate entities’ positive and negative impact on the environment and society, based on underlying business activities, strategy, targets, policies and procedures, and governance; Framework Ratings, evaluating use of proceeds, KPIs, and overall framework strength and governance, and; Instrument Ratings, which integrate the entity and framework-level scores, allowing for comparisons between instruments across sectors, geographies and labelling frameworks.
At launch, coverage includes more than 750 individual issuances within the corporate and financial institutions sectors across North America, the UK, and Europe, with plans by mid-2023 to cover all of the growing labelled GSS market, including structured finance, public finance, agency, and sovereign debt issuances.
“Investor demand for more detail and clarity in ESG continues to grow. We are pleased to offer transparent, cross-comparable ESG Ratings for entities, debt instruments and frameworks. Building on our track-record of best-in-class ESG data and analysis, Sustainable Fitch’s ESG Ratings allow investors to both evaluate and distinguish ESG impact, outcome and performance at a detailed individual factor level.”