The integration of environmental, social and governance (ESG) risk factors into fixed income investing has quickened. The trend is being advanced by the efforts of mainstream investment management firms like PIMCO, BlackRock and JP Morgan, and credit rating agencies. Fitch, Moody’s and S&P, have adopted more explicit approaches to reflect environmental, social and governance risks/opportunities in their ratings. In general, applying ESG risks and opportunities to bonds is more difficult than equities due to the structure, complexity and diverse nature of bonds. For example, whether to evaluate the issuer or the issue and the impact of time horizon on the risk profile of bonds given various maturities introduce complexities.
The rating agencies have launched an integrated scoring system which shows how environmental, social and governance (ESG) factors impact individual credit rating decisions. To explain their approaches, Fitch Ratings, Moody’s Investors Service and S&P Global will be participating in an expanded meeting that will consist of presentations by each credit rating agency, followed by a Q&A session. The meeting is open to all CFA Society New York members.
INTRODUCTIONS, INCLUDING CFA INSTITUTE’S DEFINITION OF ESG INTEGRATION
RATING AGENCY PRESENTATIONS
Andrew Steel, Global Head of Sustainable Finance, Fitch Ratings
Michael Rowan, CFA, Managing Director, Global Public, Project and Infrastructure Finance, Moody’s Investors Service
Michael Ferguson, Director, Energy Information and Sustainable Finance, S&P Global