Introduction to ESG Ratings
Providing global comparability for all sectors and financial instruments
Fitch hosted on Wednesday 22 September, 4:00 PM BST, a presentation of Sustainable Fitch’s new ESG Ratings.
Fitch Group’s new division, Sustainable Fitch, recently launched a comprehensive range of ESG Ratings products, at both an entity and instrument level, for all asset classes globally.
The ESG Ratings suite is designed to help market players to discriminate the ESG quality of both financial instruments and the entities that issue them. Our ESG Entity Ratings evaluate an entity’s activities from an environmental and social perspective, as well as the quality and outcomes of its policies and governance. Our ESG Instrument Ratings assess the ESG credentials of individual bonds or loans in the context of the entity that is issuing them, and where there is a labelled or KPI-linked instrument also provide a standalone assessment of the quality of the framework. Fundamentally, the focus of our ESG Rating analysis is on actions, outcomes, impacts and activities rather than purely on policies and broader commitments. Our instrument analysis looks beyond the labelling to focus on the fundamentals.
The ESG Ratings suite can assess all types of debt instruments (bonds and loans), whether they are labelled, plain vanilla, or structured instruments, as well as any type of entity (corporate, leveraged finance, financial institution, sovereign, supranational and agency (SSA), project finance, public finance and structured finance).
 In this session, Andrew Steel, Managing Director, Global Head of Sustainable Fitch, and Gianluca Spinetti, Senior Director, Head of Product Development, detailed the ESG Rating methodology, explained how ratings can be used and discussed findings from the first universe of ratings assigned.
Â
Highlights Included:
- Addressing capital market needs and concerns
- Providing modularity and granularity
- Introduction to ESG Entity Rating, ESG Instrument Rating, and ESG Framework Rating
- Methodology and references used (EU Taxonomy, UN SDGs, EU Green Bond Standard, ICMA guidelines)
- Data and research output
- Facts and findings from assigned ratings
Thomas van Lanschot has been working as a senior analyst for the power and renewables team in London after working in various roles for several years in the flood risk, offshore renewables and energy policy development sectors. He joined Fitch Solutions after completing a PhD in energy systems and has a background in civil and renewable engineering. He now focusses on the team’s power and renewable research in the sector's investment trends, opportunities and risks as well as leading our coverage the major for European and China energy markets. He also leads in depth global research for the hydrogen, onshore and offshore wind industries as well as broader power sector technology developments.
