Prospective investors are increasingly focusing on environmental, social and governance (ESG) factors when making investment decisions. But while, traditionally, focus centred more on environmental factors – given these tend to be more visible than social and governance factors – social and governance factors are becoming more prominent in decision-making, not least because the links between strong governance and company performance is being better understood. That’s according to Mike Wilkins, S&P Global Ratings’ Head of Sustainable Finance, who was interviewed recently by Infrastructure Investor.
“There’s been a refocus on governance as an issue,” says Wilkins. “In our experience, we see governance as having a bigger impact towards the evaluation than the other two components.”
The full interview can be found here (behind paywall).
S&P Global Ratings has published 2019’s first edition of Infrastructure Finance Outlook, its newsletter of key infrastructure and project finance-related research and ratings news.
In this edition, S&P Global Ratings considers global infrastructure investment trends, spanning China, the GCC and the Americas, along with the regulatory and political risk factors across these regions.
With global political uncertainties on the rise, infrastructure investors are even more focused on long-term sustainability. And, as environmental, social, and governance (ESG) considerations are rising to the fore of investment strategies, the credit rating agency dedicates this edition to providing greater insight to its newest offering, the ESG Evaluation.
Please see the full newsletter in PDF here.
There are possible parallels between the principles of Islamic Finance and environmental, social and governance (ESG) factors. That’s according to a recent report from S&P Global Ratings, entitled “Islamic Finance and ESG: The Missing S”.
According to the report, environmental (‘E’) and governance (‘G’) factors enjoy more visibility in modern Islamic finance. And while social (‘S’) aspects are found in several Islamic financing instruments, these have yet to be leveraged in a transparent and systematic manner. This said, a few Islamic banks have set public objectives on social responsibility, which could be demonstrative of a slow realisation across the Islamic finance industry that it could engage with a sustainable financial system, in S&P’s opinion.
Following outreach by Moorgate, the report was covered by Environmental Finance, Islamic Finance and Trade Arabia.
S&P Global Ratings has awarded a Green Evaluation score of E2/68 to Minera Los Pelambres’ proposed US$875 million loan – the second highest score available on the Green Evaluation scale of E1-E4 – making Los Pelambres the first mining company globally to receive a Green Evaluation. The loan facility will fund part of the company’s US$1.3 billion copper mine expansion project, based in Chile.
Roughly US$530 million of the US$875 million loan is labelled as a green financing since proceeds will be deployed at the new water desalination plant and the associated pipeline. The plant will bring seawater to the plant in Choapa Valley, instead of competing for fresh water in neighboring municipalities, where water resources are scarce and expensive.
Following outreach from Moorgate, TXF News covered the Green Evaluation.
According to a recent report by S&P Global Ratings, executives and asset managers are in agreement that the rise of environmental, social, and governance (ESG)-based investing will likely accelerate as a younger, more values-oriented crop of investors enter the global markets.
Doug Peterson, S&P Global President and CEO, told attendees of launch event for S&P Global Ratings’ ESG Evaluation tool, “Now more than ever, companies understand and have a much better appreciation of their responsibilities as corporate citizens. We see ESG matters as an essential component of sustainable company performance.”
Following outreach from Moorgate, the report was covered by Aqua Now, Wealth Adviser, SDG Knowledge Hub, and Institutional Asset Manager.
In an interview with Environmental Finance, Michael Wilkins discusses the recent launch of S&P Global Ratings’ ESG Evaluation.
Separate from S&P Global Ratings’ credit ratings, the tool aims to help investors gain a better understanding of a entity’s strategy, purpose and management quality in relation to rising environmental, social and governance concerns.
Enhancing the ESG Evaluation’s analytical approach is S&P Global Ratings’ newly launched ESG Risk Atlas. This online infographic charts exposure to environmental and social risk for more than 30 sectors and incorporates exposure to natural disasters, corporate governance standards, and ESG-related regulations to provide country scores.
Read the full interview here (requires registration).
Following the launch of S&P Global Ratings’ Environmental, Social, and Governance (ESG) Evaluation, Global Capital interviewed Michael Wilkins, Managing Director and Head of Sustainable Finance, S&P Global Ratings.
In the interview, Wilkins discusses the launch, the methodology behind the ESG Evaluation tool, and the pilot studies conducted so far.
Wilkins commented on the tool: “I think it’s ground-breaking because it really does go beyond what a traditional credit rating agency does. We have now started to look at ESG with a different lens, and that is the lens of the impact ESG has on stakeholders across the board. So it’s much broader than the typical focus on the impact on debt and equity.”
The full interview can be found here (behind paywall).
S&P Global Ratings recently launched its ESG Evaluation. The tool provides a cross-sector, relative analysis of an entity’s capacity to operate successfully in the future and is grounded in how environmental, social, and governance (ESG) factors could affect its stakeholders and potentially lead to a material financial impact.
“The ESG Evaluation aims to deliver a forward-looking view that sets a new holistic benchmark in sustainability,” said Michael Wilkins, Managing Director and Head of Sustainable Finance, S&P Global Ratings.
Following Moorgate outreach, the launch was covered by: Markets Media, Global Banking & Finance Review, Environmental Finance, Institutional Asset Manager, The Asset, Business Green, Global Capital here, here and here, Edie.net, and ETFWorld.
S&P Global Ratings has announced that it has started to include ESG (environmental, social, and governance) sections within its credit rating reports on corporate entities. The new section signifies a move towards greater transparency across S&P Global Ratings’ credit analyses, particularly as market interest in ESG factors continues to increase.
The credit ratings agency has been phasing in the dedicated ESG sections, having already started with two sectors that have the greatest exposure to credit-relevant ESG factors: oil & gas and utilities. Throughout the course of the year, S&P Global Ratings expects to roll out the initiative to all major companies across every sector and smaller companies most exposed to ESG factors – representing approximately 40% of its rated corporate universe.
“We have long incorporated ESG considerations into our credit analysis,” says Michael Wilkins, Managing Director and Head of Sustainable Finance at S&P Global Ratings, “What we aim to do now is to more clearly underline to industry bodies, investors, and stakeholders how we do so.”
Following outreach from Moorgate, the news was covered by: Business Green here and here, Market Watch, Financial Times (behind paywall), Responsible Investor (behind paywall), Top 1000 Funds, GreenBiz, IPE, Markets Media, Bond Buyer, Environmental Finance (behind paywall), Institutional Asset Manager, Better Society (requires subscription) and Think Advisor.
What key trends do infrastructure investors face in 2019? For one, nationalist and populist movements are on the rise – creating an environment of heightened political risk, which investors may find hard to navigate. The result could weigh heavily on regulatory stability, as well as country risk or sovereign credit quality.
In tandem, environmental, social, and governance (ESG) matters are beginning to rise in prominence. Increasingly, investors are stepping up their focus in their investment mandates on companies that are seen as acting more sustainably.
Against this backdrop, the latest edition of Outlook keeps investors abreast of the most-read research from the past quarter – offering insights into how the Infrastructure segment is changing and, importantly, how it may yet evolve.
Outlook is available in PDF here
Moorgate compiles, edits and designs Infrastructure Finance Outlook.