Sustainability and Credit Risk

As pressure increases on businesses and investors to assess sustainability risks, stakeholders in every sector are focusing more on the potential positive and negative impacts of environmental, social, and governance (ESG) factors. At S&P Global, we help guide your understanding of sustainability risks to support a resilient credit landscape with a suite of cutting-edge analytical models.

Looking for an integrated offering that provides a credit assessment framework along with guidance on E, S, and G factors that can impact creditworthiness?

Scorecards with ESG Credit Metrics explicitly include ESG credit risk factors that are considered in detail alongside traditional credit analysis formalized in the Scorecards. The ESG Credit Metrics are alpha-numeric quantifications of the expected impact of the ESG credit risk factors on a final credit score[1] and are shown on a scale from 1 to 5, with 1 being positive and 5 very negative..

Looking to quantify the impact of climate-related financial risk for stress testing or climate scenario reporting that includes a bottom-up approach and granularity for high-carbon emitting sectors?

Through a highly dynamic, sector-specific approach and models that provide forward-looking impacts of climate transition and physical risks, Climate Credit Analytics enables counterparty- and portfolio-level analysis of climate-related financial and credit risks for thousands of companies across multiple sectors.

Looking to further evaluate the impact of climate-related scenarios on your portfolios to better understand the possible risks and opportunities that may arise on the journey to a low-carbon economy?

Climate RiskGauge can be used in conjunction with Climate Credit Analytics. It enables users to estimate the financial impact of climate transition and physical risk by looking at a compact set of financials, projected emissions, and a firm’s implied market capitalization to arrive at an estimation of a credit score change[1] over a given time for public and private companies.

Looking for a way to bring climate risk factors into your risk management framework?

Integrate both transition and physical risks with a comprehensive portfolio climate risk solution. Utilize S&P Global’s sustainability data to model these risks, capturing projected carbon costs on earnings with the Carbon Earnings at Risk dataset and assessing the impact of extreme weather events with the Physical Risk dataset from S&P Global Sustainable1. Calculate Portfolio Climate VaR and run Climate Stress Scenarios for a detailed view of the P&L impact, analyzing risk at both the security and portfolio levels.