European credit rating and financial analysis agency Scope Group announced the launch of new ESG and sustainable finance-focused services including green bond and ESG bond certification and second-party opinions (SPO).
The new offerings add to Scope’s suite of ESG services including the ESG Impact Review, which incorporates the impacts of companies’ global supply chains, and supplementary services addressing issuers’ alignment with the EU Taxonomy, the ‘Do No Significant Harm’ requirements, the UN’s Sustainable Development Goals and the 2015 Paris Accord.
Diane Menville, Head of ESG at Scope, said:
“The rapid world-wide growth of labelled ESG debt issuance across all borrower universes – sovereigns, government and supranational agencies, financial institutions and corporates – is driving parallel demand for independent opinions, certification, assurance and verification as institutional investors and issuers focus on meeting ever-pressing ESG demands from clients. ESG criteria are already acting as market compasses and will become tomorrow’s standards. As such, they constitute a de facto sovereignty issue for markets and countries.”
Scope has been approved as a verifier under Climate Bonds Initiative’s Climate Bonds Standard and Certification Scheme, a science-based multi-sector labelling scheme for green bonds and other green debt products. As an approved verifier under the scheme, Scope will assess an issuer’s upcoming bond against the standard as well as sector-based technical criteria, and verifying the bond, if it complies, to be marketed to investors as a Certified Climate Bond.
The new SPO service spans the range of labelled debt instruments, including green bonds, social bonds, sustainability bonds, and sustainability-linked (KPI-linked) bonds. Scope’s analysis is aligned with the core components of the Green Bond Principles, the Social Bond Principles, the Sustainability-Linked Bond Principles and the Sustainability Bond Guidelines published in the sustainable finance section of the International Capital Market Association’s website.
Scope has created a five-level scoring model system for SPO reporting, with scores ranging from three green leaves, indicating transformative environmental contribution and strong alignment with all relevant market standards, to a brown leaf, meaning negative environmental impact.
“In the bond pre-issuance phase, we work with issuers across sectors as well as underwriters to prepare External Reviews, using issuance frameworks or individual bond documentation as a basis. Once an instrument has been issued, we can engage with borrowers to prepare impact and use-of-proceeds monitoring reports.”