ESG Evaluation and Sustainable Financing Opinions

ESG Evaluation

The ESG Evaluation is a forward-looking, data-driven opinion of a company’s ability to manage future ESG risks and opportunities. The ESG Evaluation uses company responses from the S&P Global Corporate Sustainability Assessment (CSA) and is further supported by deeper engagement between Ratings’ Analysts, company management, and a board member. The final ESG Evaluation allows for a cross-sector comparison with other entities globally.

Developing an ESG Evaluation

There are two primary inputs to the ESG evaluation process

Profile Analysis

Understand a company’s current ESG performance
Assesses exposure to observable ESG risks and opportunities
Considers governance structure in mitigating risks and capitalizing on opportunities

Preparedness Assessment 

Understand extent to which the company is well prepared for future risks and opportunities
Incorporates the views of company management and a board member to assess a company’s capacity to anticipate and adapt to a variety of long-term plausible disruptions (not limited to environmental or social scenarios)

Sustainable Financing Opinions

S&P Global Ratings’ Sustainable Financing Opinions help issuers/entities provide investors with greater insight into how their investment in an issuance may impact and align with global environmental, social, and sustainability goals.

Offerings include:

Second-Party Opinion
Use of Proceeds Financing
Assesses a framework or transaction where the proceeds will be used exclusively to finance or refinance eligible environmental or social projects—for alignment with accepted market principles or guidelines.
Market principles or guidelines include:
Green Framework / Transaction
Alignment with Green Bond Principles (GBPs) and/or Green Loan Principles (GLPs)
Alignment with ASEAN Green Bond Standards
Social Framework / Transaction
Alignment with Social Bond Principles (SBPs) and/or Social Loan Principles (SLPs)
Sustainability Framework / Transaction
Alignment with SBPs and/or the GBPs (collectively known as the Sustainable Bond Guidelines)
Second-Party Opinion
Sustainability-Linked Financing 
Assesses a sustainable finance framework or transaction where the proceeds will be used for general corporate purposes but incorporate measurable, forward-looking sustainability key performance indicators and sustainable performance targets into the financial and/or structural characteristics of the instrument— for alignment with accepted market principles.
Market principles or guidelines include:
Sustainability-Linked Framework / Transaction
Alignment with Sustainability Linked Bond Principles (SLBPs) and/or Sustainability Linked Loan Principles (SLLPs)
Transaction Evaluation
A Transaction Evaluation provides a point-in-time score on the relative environmental benefit generated by a green/resilience financing and an opinion on governance and reporting. A green Transaction Evaluation can also be combined with an alignment opinion with Green Bond Principles, Green Bond Standards, and Green Loan Principles.

S&P Global Ratings’ ESG Evaluation allows for cross-sector comparison with other entities globally