Sustainable Fitch-London-28 November 2022: Sustainable Fitch has launched its ESG Ratings for global labelled structured bonds and covered bonds. This follows the September launch of ESG Ratings, Data & Analysis covering North American, UK and European corporates, and financial institutions.
Sustainable Fitch will now offer entity ratings, framework ratings and instrument ratings for covered bonds, and framework and instrument ratings for ABS bonds. In particular, Sustainable Fitch will provide ratings on labelled structured notes spanning the following sectors: RMBS, CMBS, solar ABS, auto ABS, consumer ABS and utilities ABS.
Sustainable Fitch’s ESG Ratings, Data & Analysis offers granular and transparent ESG ratings and sub-scores at an entity, framework and instrument level. ESG ratings are provided on an absolute and fully cross-comparable rating scale, with qualitative commentary from ESG analysts, produced via robust processes that ensure the independence of our ratings.
– Entity Ratings evaluate an issuing entity’s positive and negative impact on the environment and society based on both their underlying business activities, overall strategy, targets, policies & procedures, and governance.
– Framework Ratings evaluate a financial instrument’s impact on the environment and society based on the Use of Proceeds or Key Performance Indicators, where applicable, and the strength and governance of the instrument’s overall framework.
– Instrument Ratings integrate the Entity Rating and Framework Rating, providing issuer ESG context to instruments and allowing for absolute comparison of financing instruments across sectors, geographies and labelling frameworks.
Sustainable Fitch’s current dataset of labelled structured bonds is in excess of USD100 billion. This expands on the initial set of USD500 billion of labelled and KPI-linked instruments issued by North American, UK and European corporates, and financial institutions. “ESG Ratings, Data & Analysis” is available via data feed, API, Excel Add-In and web application. Sustainable Fitch aims to achieve full coverage of labelled bonds by early 2023, including public finance, agency and sovereign debt issuances.
Mike Simonton, Head of Sustainable Fitch, says: “Sustainable Fitch was launched with a goal of both listening to investors and providing products that offer a comprehensive assessment of ESG fundamentals. The expansion of Sustainable Fitch’s ESG Ratings to global labelled structured bonds and covered bonds meets a critical market demand. Our ESG data and analysis combined with ESG Ratings provide investors with the necessary tools to evaluate ESG impact, outcome and performance at a detailed individual factor level.”
Earlier this year, Sustainable Fitch launched ESG Scores for Leveraged Finance, which provides the CLO investment community with granular assessment of environmental, social and governance factors for leveraged finance entities and labelled issuance.