Category: Governance
The credit rating agency has medium-term plans to bring the issuer-pays model to ESG ratings The credit rating agency has medium-term plans to bring the issuer-pays model to ESG ratings The credit rating agency has medium-term plans to bring the issuer-pays model to ESG ratings
Fitch Group has announced the launch of a new unit which will rate the ESG performance of companies, in addition to bonds and loans, making it the last of the the big three credit rating agencies to enter into the ESG ratings space.
The newly-created Sustainable Fitch will offer entity-level ESG ratings - similar to other conventional ESG ratings products on the market - together with ESG assessments of debt instruments and sustainability frameworks which underpin those instruments.
According to Fitch, its framework rating will assess the effectiveness of the use of proceeds frameworks for labelled bonds and sustainability-linked targets for loans on a standalone basis without accounting for the issuer’s broader activities, while its instrument rating will combine both entity and framework ratings to provide a holistic assessment of a specific instrument's ESG profile.
Conventional bonds and loans, which do not have underlying sustainabili…