Fitch Launches ESG Ratings Product

    Stockholm (NordSIP) – Fitch Group, one of the Big Three credit rating agencies, announced the launch of Sustainable Fitch, a new product through which the company will offer ESG Ratings at both an entity and instrument level for all asset classes globally.

    Sustainable Fitch will be headed by Andrew Steel, Managing Director, Global Group Head of Sustainable Finance. “Investors want transparent, cross comparable ESG ratings that look beyond labelling or targets to assess ESG fundamentals,” Steel said. “Sustainable Fitch will provide investors with best-in-class ESG Ratings, supported by data and analysis backed by the key tenets of consistency, comparability, coverage and granularity.”

    The creation of Sustainable Fitch follows the launch of Fitch Ratings ESG Relevance Scores, which show the impact of ESG factors on credit rating decisions and now cover over 10,500 issuers and transactions.

    The ESG rating coverage of Sustainable Fitch will start out by being focused on the ESG-labelled market, before extending to the entire fixed-income investable universe. The new ESG ratings are backed by clear methodologies, with source data derived using the same trusted principles and platforms that underpin Fitch credit ratings. They are both modular and granular, show how they are derived and are backed by Sustainable Fitch’s dedicated team of ESG analysts. Coverage will not be limited to the Fitch credit ratings universe or the existing universe of green or sustainable-linked bonds.

    Sustainable Fitch’s capabilities will 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 ESG Ratings suite is composed of three major pillars, including an ESG Entity Rating, an ESG Instrument Rating, and for labelled or KPI-linked debt instruments, an additional ESG Framework Rating.

    “We have spent a lot of time assessing what is currently available in the market, listening to and gathering feedback from investors and other market participants. Our new ESG Ratings product is in direct response to what the market is asking for, as was the case in 2019 when we created our ESG Relevance Scores with investors in mind,” Paul Taylor, CEO, Fitch Group, added.

    Image by Dimitris Vetsikas from Pixabay

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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