21ESG 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