More ESG to apply in credit ratings

A report from Moody’s says that ESG issues will play a larger role in assessing credit ratings.

Financial strategy and risk management, climate change, demographics and income inequality were highlighted as factors likely to grow in importance in the analysis of ESG for assessing companies’ credit quality, the firm said. Moody’s cited ESG risks as material credit considerations in 33% of the 7637 ratings published in 2019. Carmakers had the highest proportion of ratings action citing environmental considerations, followed by coal mining, coal terminals as well as regulated electric and gas utilities with generation.