Credit ratings, research, and risk analysis provider Moody’s Investors Service announced today that it has expanded its ESG profile and credit impact scores to several new industries and sectors, including consumer products, beverages, shipping, manufacturing, aerospace & defense, financial institutions, large US counties and European public sector housing.
In order to incorporate all material credit considerations into its credit ratings, Moody’s integrates ESG considerations into the credit analysis of companies and organizations in these sectors, including each entity’s risk exposure and the degree of credit impact. Moody’s analysis will 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.
Moody’s initially launched IPS and CIS scores in January 2021, initially focusing on sovereign issuers, and has expanded its coverage over the past year, adding sectors ranging from healthcare, airlines, utilities, media and automakers to states, cities and counties. More sector introductions are expected throughout 2022.
Brian Cahill, Managing Director of ESG at Moody’s Investors Service, said:
“Market participants are increasingly focusing on ESG issues and their potential to affect credit risk and investment decisions. Our ESG Issuer Profile Scores and Credit Impact Scores provide a transparent, consistent and quantified assessment of how ESG impacts our credit analysis.”