Credit ratings, research, and risk analysis provider Moody’s announced today the expansion of its ESG Issuer Profile Scores and Credit Impact Scores with publications targeting large cities and counties in the U.S. with between $500 million and $1 billion in outstanding debt.
The reports include two types of ESG scores, including issuer profile scores (IPS) and credit impact scores (CIS). IPS scores measure issuer’s exposure to ESG considerations that could be material to credit risk, while CIS gauges the impact those ESG considerations have on an issuer’s credit rating.
According to Moody’s, the reports reveal that exposure to environmental credit considerations is negative or highly negative for more than 40% of the US cities, and moderately negative for almost 40% of counties.
Adebola Kushimo, VP-Senior Credit Officer at Moody’s Investors Service, said:
“Physical climate risk – including hurricanes, sea level rise, wildfires and drought – is the most prevalent environmental credit consideration for most of the large US cities and counties we scored.”
Social considerations tended to have less of an impact on the scores, with the reports finding neutral to low exposure for most cities and counties, while governance considerations such as policy credibility and effectiveness and budget management were generally positive for cities and strongly positive for counties.
Coley J Anderson, VP-Analyst at Moody’s Investors Service, said:
“Demographic trends and labor and income, heavily influential social considerations in terms of the economy, are generally sound for US cities and counties.”
The new reports follow the launch in June by Moody’s of ESG profile and credit impact scores for cities with more than $1 billion in debt, along with U.S. states and sectors including global pharmas, medical device companies, and regulated electric and gas utilities. Earlier this year, Moody’s also introduced ESG and credit impact scores for sovereigns.