Fitch Group has announced the launch of Sustainable Fitch which will offer ESG ratings for all asset classes globally.
Fitch says the new ESG ratings provide a full assessment of ESG performance at entity, instrument and framework level, allowing for detailed comparability. They come after the 2019 launch of Fitch Ratings ESG Relevance Scores which show the impact of ESG factors on credit rating decision. Sustainable Fitch’s capabilities will now include:
ESG-integrated credit research and analysis via existing ESG Relevance Scores;
Climate risk assessment through its existing Climate Vulnerability Scores;
Pure ESG analysis and reports via the new ESG Ratings; and
Ongoing sector and thematic ESG research.
The coverage of the new ratings include:
Full coverage of labelled bonds (green, social, sustainable, KPI-linked, transition);
Instrument and entity level reports and ratings (including framework analysis);
Ability to cover any debt instrument (bonds and loans, labelled and conventional);
Fully modular grading system (access to sub-grades for all main indicators); and
Consistent disclosure of alignment indicators (ICMA, UN Sustainable Development Goals, EU Green Bond Standard, etc.)
The ESG Ratings suite assesses all types of debt instruments (bonds and loans), whether they are labelled, plain vanilla, or structured instruments. The suite also covers any type of entity: corporate; leveraged finance; financial institution; sovereign, supranational and agency (SSA); project finance; public finance; and structured finance.
The ESG Ratings suite is composed of three major pillars: an ESG Entity Rating (ER1-5); an ESG Instrument Rating (IR1-5); and for labelled or KPI-linked debt instruments, an additional ESG Framework Rating (FR1-5).
Sustainable Fitch will be headed by Andrew Steel, Managing Director, Global Group Head of Sustainable Finance.