In an interview for specialist financial magazine Global Capital, Michael Wilkins, head of environmental and climate risk research at S&P Global Ratings, explains that – in response to investor demand – S&P has proposed two new assessment tools for evaluating the environmental impact of a bond issued or a future project.
In the interview, Wilkins describes the new ‘Environmental, Social and Governance (ESG) Assessment’ that will rank issuers on a five point scale, according to their level of exposure to these associated risks. In addition, S&P’s ‘Green Bond Evaluation’ tool is designed to evaluate corporate green bond issuance in a more standardized and transparent way. Wilkins notes that these tools “reflect the demand we think exists for looking beyond credit risk, in the world of ESG and green finance”.
He argues that these factors are becoming a bigger and more common consideration for investors, which, for many, is viewed as crucial preparation for future changes in climate and environmental regulation.
The full article in which Mike Wilkins views are opined can be read here.