Moody’s updated ESG Cross Sector Methodology introduces new ESG Issuer Profile and Credit Impact Scores for issuers and transactions across corporates, infrastructure, public finance and financial institutions.
In this session, Moody’s analysts reviewed the approach to the new regulated electric and gas utility (with generation) ESG Issuer Profile and Credit Impact Scores and provide some key highlights from its analysis about the impact of ESG on credit.
- How do the scores enhance integration of ESG considerations into credit ratings?
- Which case studies exemplify each end of the 1-5 scale?
- What underlying data sources were used in the methodology?
About the scores
- James Leaton, Senior Vice President, ESG
- Jim Hempstead, Managing Director
- Graham Taylor, Vice President – Senior Credit Officer
- Jeff Cassella, Vice President – Senior Credit Officer
- Jairo Chung, Vice President – Senior Analyst
- Nana Hamilton, Vice President – Senior Analyst
- Edna Marinelarena, Assistant Vice President
Issuer Profile Scores (IPS)
are separate environmental, social and governance scores that assess an entity’s exposure to the categories of ESG that MIS regards as the most material to credit. The assessment of the exposure to E, S and G risks or benefits is based on the general ESG principles described in the methodology, and the scores provide a consistent way to express this assessment.
ESG Credit Impact Scores (CIS) reflect the impact of ESG considerations on the rating of an issuer or transaction. Whereas the E, S and G profile scores are based on an issuer’s or transaction’s outright exposure to ESG risks or benefits and ESG specific mitigants, the CIS places ESG considerations in the context of the issuer’s other credit drivers that are material to a given rating.