For the third year in a row, Moody's Ratings has been named the Most transparent credit rating agency as it published issuer profile and credit impact scores for over 12,000 entities and 3,700 structured finance transactions.
The issuer profile score indicates an issuer's environmental, social and governance (ESG) credit risk exposures, while a credit impact score reflects the overall impact of ESG on the credit rating of an issuer or transaction.
In addition, the ratings agency publishes sector-level reference points of environmental and social credit risk exposure through its environmental and social heatmaps. These cover its rated debt universe of $84 trillion, across 90 sectors.
Elsewhere, Moody's Ratings also picked up the ESG research of the year (fixed income) award for its paper exploring the challenge posed by the global climate finance gap as vast sums are needed for the world to shift to a low-carbon economy, build resilience, and adapt to the effects of climate change.
'The climate finance conundrum' piece provides an analysis of the current state of climate finance and concludes that by 2030, there will be an annual investment gap of $2.4 trillion in climate mitigation funding. In addition to this, there is an adaption gap, which in 2022 stood at $328 billion.
It argues for closing this investment gap and stresses the importance of early intervention to prevent climate change-caused economic losses.
Moody's Ratings research also attempts to illustrate how substantial government spending in the next decade can lead to reduced economic losses in the future and generate higher growth and revenue over time. Yet, it also highlights three significant polluters with the largest investment gaps: South Africa, India, and Brazil, and stresses that eliminating the gap solely through government spending would substantially increase their respective debt burdens.
"Important piece of research given the political climate, and also innovative. Liked the fact that it was actionable too," said one Sustainable Investment Awards judge.
