S&P Global say they will no longer issue ESG scores for corporate debt.
The move comes following criticism from investors about the quality of the ratings. The ratings, scored on a scale from 1 to 5, are designed to measure a listed company’s ESG risk. S&P now say they will only issue text only ESG assessments and not scores.
S&P said in a statement, “We have determined that the dedicated analytical narrative paragraphs in our credit rating reports are most effective at providing detail and transparency on ESG credit factors material to our rating analysis, and these will remain integral to our reports”. The firm says the decision would take effect immediately.