Sustainable Fitch Launches ESG Ratings Product for Investors

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Sustainable Fitch has launched its ESG Ratings product for investors. ESG Ratings, Data & Analysis offers granular and transparent ESG ratings and sub-scores at an entity, framework and instrument level. ESG ratings are provided on an absolute and fully cross-comparable rating scale, with qualitative commentary from ESG analysts, produced via robust processes that ensure the independence of ratings.

The granular and modular nature of Sustainable Fitch’s dataset allows investors to distinguish between ESG impact, outcome and performance at a detailed individual factor level. Sustainable Fitch’s “ESG Ratings, Data & Analysis” offers the capability to compare individual characteristics of entities and debt issuance between entities within a sector, across different sectors and across asset classes.

ESG Ratings are on an absolute scale, comparable across sectors and geographies, and are monitored for both positive performance and controversial incidences.

  • Entity Ratings evaluate an issuing entity’s positive and negative impact on the environment and society based on both their underlying business activities, overall strategy, targets, policies & procedures, and governance.
  • Framework Ratings evaluate a financial instrument’s impact on the environment and society based on the Use of Proceeds or Key Performance Indicators, where applicable, and the strength and governance of the instrument’s overall framework.
  • Instrument Ratings integrate the Entity Rating and Framework Rating, providing issuer ESG context to instruments and allowing for absolute comparison of financing instruments across sectors, geographies and labelling frameworks.

Sustainable Fitch has launched coverage for investors with an initial dataset of in excess of half a trillion dollars of labelled and KPI-linked instruments issued by North American, UK and European corporates, and financial institutions. “ESG Ratings, Data & Analysis” will be available via data feed, API, Excel Add-In and web application. Sustainable Fitch aims to achieve full coverage of labelled bonds by early 2023, including structured finance, public finance, agency and sovereign debt issuances.

Andrew Steel, Managing Director, Sustainable Fitch, says: “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 Fitch’s 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.”

Sustainable Fitch recently launched “ESG Scores for Leveraged Finance”, which provides the CLO investment community with granular assessment of environmental, social and governance factors for leveraged finance entities and labelled issuance.

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