Environmental Finance's Sustainable Debt Awards 2024

External assessment provider of the year: S&P Global Ratings

S&P Global Ratings further developed its second party opinion (SPO) offering by integrating Shades of Green into its use of proceeds. Having fully acquired Shades of Green from Cicero in December 2022, it fully integrated it into its methodology by June 2023.

The Shades of Green is a rating system that is a qualitative assessment of how consistent a green bond's use of proceeds are with a low-carbon climate-resilient future.

Its shades rank from the highest; Dark Green, through Medium Green, Light Green, Yellow, Orange, and Red at the lowest. Dark Green is for projects that correspond to a low-carbon and carbon-resilient future, such as solar panel plants. Light Green is attributed to transitional projects that have reduced emissions, such as hybrid vehicles. Red is for projects that play no role in a low-carbon future such as new oil exploration.

Another feature S&P Global Ratings added to its SPO was the 'issuer sustainability context'. For this S&P Global Ratings considers which sustainability factors are most material for the issuer, using resources such as its ESG Materiality Maps, to provide the context of the financing within the broader framing of the issuer's key sustainability factors.

These steps have enabled S&P Global Ratings to become the second-largest reviewer in the market, by number of SPOs provided and the largest, by volume, external reviewer of green financing, according to Environmental Finance Data.

Christa Clapp"It's an honour to be trusted by investors for the quality and consistency of our SPOs, backed by the Shades of Green approach and providing deeper transparency on climate risks," said Christa Clapp, global head of sustainable finance markets analytics at S&P Global Ratings.

Elsewhere, S&P Global Ratings revamped its Sustainability Insights portal, where it now houses its sustainability thought leadership research. Here it published several papers looking at, among other things, risk of GDP loss from physical climate change, trends in transition risk and the challenges of non-revenue water.

"Their breadth and depth of assessment is very impressive," commented one Sustainable Debt Awards judge. "I have always appreciated CICERO's Shades of Green approach when they started to do this over a decade ago and I am glad that S&P brought that into their fold."

"Shades of Green scale provides a simplified, consistent, and transparent scale for investors to assess the greenness/ambition of specific projects," added another.