LATEST COMMENTARY

ESG Credit Trends 2022

FITCH COMMENTARY / Tue 07 Dec, 2021

Sustainable Fitch: Social Issues to Rise in Prominence for ESG Strategies in 2022

Investors, regulators and stakeholders in capital markets are paying increasing attention to social issues and this ESG theme will rise in prominence over 2022, Sustainable Fitch says in…

WHITE PAPER / Tue 07 Dec, 2021

Sustainable Fitch ESG Encyclopedia

The ESG Encyclopedia provides insights on the credit relevance and materiality of all sector specific environmental credit issues, including air quality, energy and fuel management, water, and more…

FITCH COMMENTARY / Tue 07 Dec, 2021

Sovereigns Most Vulnerable From Physical Risks to Face Ratings Pressures

Fitch Ratings expects climate-change physical risks to lead to some rating downgrades of the most vulnerable sovereigns as the effects become clearer, closer and more material…

FITCH COMMENTARY / Tue 07 Dec, 2021

Materiality of Labour Issues in Credit Driving Investor, Regulatory Calls for Disclosures

Investor-led support for more clarity on labour-related ESG risks is driving an increase in regulatory and voluntary disclosure frameworks. The push for more consistent, quantitative reporting…

SUSTAINABLE INSIGHT / Tue 30 Nov, 2021

COP26 Implications: Regulatory Risks Rise, Methane and Deforestation Pledges Sharpen Focus on New Areas

Progress in key benchmarks for success for COP26 that Sustainable Fitch set out ahead of the conference was mixed, but there were agreements in…

SUSTAINABLE INSIGHT / Tue 23 Nov, 2021

Climate Change Risks for Structured Finance: a Primer

Fitch Ratings expects climate change risks to become increasingly prominent for structured finance and that they could start to have discernible credit implications for deals issued…

VIDEO / Tue 23 Nov, 2021

Water, Air Quality, Energy, Biodiversity & Extreme Climate Issues to Affect Credits

Fitch's ESG Encyclopedia discusses risk exposure to extreme weather events, water, energy and fuel, air quality, biodiversity and water…

VIDEO / Tue 23 Nov, 2021

Proposed Rules May Strengthen China’s ESG Disclosure

Proposed ESG disclosure requirements for companies could improve investor access to ESG data and risk assessment in China, but the impact would initially be limited due to weak penalties for…

FITCH COMMENTARY / Tue 16 Nov, 2021

China’s New Climate Disclosures Signal Higher Regulatory Scrutiny

Mandatory environmental information disclosure requirements for companies proposed by China’s Ministry of Ecology and Environment could improve investor access to data and risk assessment around environmental…

VIDEO / Tue 09 Nov, 2021

Evolving Data Privacy Regulations Could Drive Long-Term Shift in Business Operations

Proliferating data privacy regulations will increase compliance costs for companies, as well as litigation and fines when breaches occur.…

FITCH COMMENTARY / Tue 26 Oct, 2021

Sustainable Fitch: COP26 Crucial for Global Climate Policy Momentum

Tangible successes across different areas of the four main goals set for the UN's COP26 will be crucial in maintaining the policy momentum towards coordinated action on climate change mitigation and minimising the risk of a…

SUSTAINABLE INSIGHT / Tue 26 Oct, 2021

ESG Credit Quarterly – 3Q21

ESG Relevance Scores (ESG.RS) changes coalesced around Governance issues in 3Q21, accounting for 31% of all score changes, driven by Corporates sectors. Deterioration in Governance scores in Financial Institutions (FI) were partly driven by government interventions in…

FITCH COMMENTARY / Fri 15 Oct, 2021

Sustainable Fitch: Focus Turns to Voluntary Carbon Market Integrity, Costs

Rising demand for carbon offsets as part of net zero commitments is leading to heightened scrutiny of the integrity of underlying emissions reduction projects, Sustainable Fitch says in a new report…

SUSTAINABLE INSIGHT / Fri 15 Oct, 2021

Tightening Voluntary Carbon Markets to Drive Up Costs

Persistently low prices and historical oversupply of carbon offset credits have limited the types of projects that can be financed, with much of today’s trade linked to renewable energy projects in China and…

VIDEO / Tue 11 Oct, 2021

Increasing Investor Focus on Biodiversity Risks

Investors are increasing their focus on biodiversity in anticipation of tightening regulation, and new financial instruments could incentivise state-owned and private companies to…

VIDEO / Fri 08 Oct, 2021

Moral Money Summit: Building frameworks for a moral and sustainable future

Andrew Steel, Global Head of Sustainable Fitch, participates in a panel discussion on how to build financial, market, and regulatory frameworks for a moral and sustainable…

FITCH COMMENTARY / Tue 05 Oct, 2021

Global Data Privacy Regulations May Increase Costs for Data-Reliant Businesses

Proliferating data privacy regulations will increase compliance costs for companies, as well as litigation and fines when breaches occur, Sustainable Fitch says in a new report. The rising number of data breach…

SUSTAINABLE INSIGHT / Tue 05 Oct, 2021

Evolving Data Privacy Regulations Could Drive Long-Term Shift in Business Operations

The rising number of data breach incidents in recent years has vastly escalated concerns about and costs around data privacy and protection against cyber risks in a rapidly evolving regulatory environment…

SUSTAINABLE INSIGHT / Thu 02 Sep, 2021

Investors Grapple with Stemming Biodiversity Loss

Investor Influence Is Often Limited Biodiversity loss is a systemic phenomenon, which creates challenges for integration in investment strategies…

SUSTAINABLE INSIGHT / Thu 02 Sep, 2021

The Importance of EU Green Bond Standard Faces Obstacles to Become the Global ‘Gold Standard’

The EC’s proposed regulation on a voluntary European green bond standard (EUGBS) published in July 2021 is unlikely to become a global ‘gold standard’ and trigger a meaningful transformation of the global green bond market…

SUSTAINABLE INSIGHT / Wed 01 Sep, 2021

The Importance of Sustainable Finance Debt for Insurers Is Growing

Stakeholder pressure on insurance companies to align their business with environmental, social, and governance (ESG) principles has led to the increasing issuance of bonds that incorporate sustainable finance (SF) standards, such as green bonds, since 2019…

FITCH COMMENTARY / Tue 17 Aug, 2021

China's Circular-Economy Push Addresses Waste Reduction and Overcapacity

China’s inaugural Circular Economy Roadmap could drive long-term corporate shifts to reduce industrial waste, improve resource efficiency and tackle overcapacity in key industrial sectors, Fitch Ratings says…

SUSTAINABLE INSIGHT / Tue 03 Aug, 2021

EU’s Fit-for-55 to Spur Energy Transition in Multiple Sectors

The EU has released a wide-ranging set of inter-related regulatory proposals to reduce greenhouse gas (GHG) emissions by 55% (compared to 1990 levels) by 2030…

SUSTAINABLE INSIGHT / Wed 21 Jul, 2021

ESG Credit Quarterly: 2Q21

Governance of Sustainability Comes to the Fore Governance issues remain the most prominent and dynamic ESG Relevance Scores (ESG.RS) across all of Fitch Ratings’ asset classes…

SUSTAINABLE INSIGHT / Wed 14 Jul, 2021

Latin American Sustainable Bond Market (A Growing Presence)

Sustainable bonds became a growing presence across Latin American cross-border issuers in recent years, and Fitch Ratings expects continued growth as market participants increase their awareness of and interest in Environmental, Social and Governance (ESG) factors…

SUSTAINABLE INSIGHT / Tue 06 Jul, 2021

European Traditional Investment Managers Increase Focus on ESG

ESG Adoption Gains MomentumEuropean traditional investment managers (IMs) are increasingly focusing their fund offerings on ESG (environmental, social and governance) factors, particularly environmental sustainability…

SUSTAINABLE INSIGHT / Tue 20 Apr, 2021

Shifting Ownership Patterns of Fossil Fuel Assets and Decarbonisation

Fossil Fuel Deals Dwarf Renewable Financing – but There Are Signs of a Shift Private equity energy investments have focused heavily over the past decade on fossil fuel assets, such as thermal coal or oil and gas infrastructure…

SUSTAINABLE INSIGHT / Tue 20 Apr, 2021

Sustainable Development Shapes ESG Focus in Sub-Saharan Africa

Environmental, social, and governance (ESG) issues are influencing investment in sub-Saharan Africa among foreign, regional and domestic financial institutions…

SUSTAINABLE INSIGHT / Mon 19 Apr, 2021

Efforts to Reduce Plastic Waste Could Drive Long-Term Shifts in Business Models

Regulations are gradually tightening on plastics to reduce plastic waste, although this has a limited impact on plastic production. As social trends shift towards sustainability, plastic end-user sectors are exposed to regulatory risks…

FITCH WIRE / Mon 15 Mar, 2021

Climate Stress Tests to Be Mainstream for Banks, Insurers

Banks and insurers around the world are likely to face climate-related stress tests in the next two to three years as supervisors become increasingly aware of the urgency in gauging the risks from climate change, Fitch Ratings says in a new report…

SUSTAINABLE INSIGHT / Mon 03 Mar, 2021

Climate Change Stress Tests Are Becoming Mainstream

Global Testing Is Expanding Fast Regulatory climate change stress testing for banks and insurance companies is expanding fast…

SUSTAINABLE INSIGHT / Mon 08 Feb, 2021

National Carbon Market Tool to Achieve China's Low Carbon Transition

The operational phase of China’s national emission trading scheme began on 1 February 2021, starting with 2,225 entities in the power sector…

SUSTAINABLE INSIGHT / Thu 04 Feb, 2021

National Modern Slavery and Labour Risk in Global Supply Chains

Sectors such as agriculture, consumer goods manufacturing, and minerals and mining face risks in the sourcing of their goods related to modern slavery, Fitch Ratings says…

SUSTAINABLE INSIGHT / Tue 19 Jan, 2021

What Investors Want to Know: Key Questions from Fitch's ESG Outlook Conference

Fitch Ratings hosted its inaugural ESG outlook conference on 1-3 December 2020, a live virtual event featuring 28 Fitch analysts alongside 24 guest panellists across 19 sessions. The conference hosted more than 1,500 unique attendees, attracting a wide variety of thoughtful questions on numerous ESG topics…

SUSTAINABLE INSIGHT / Thu 19 Nov, 2020

ESG in Credit - Water Issues

The ESG in Credit series of reports provides insights on the credit relevance and materiality of sector-specific environmental, social and governance (ESG) credit issues and offer guidance on investor approaches to evaluating ESG risk factors in investment analysis and decisions…

SUSTAINABLE INSIGHT / Thu 12 Nov, 2020

Sustainability-Linked Debt Ties Borrowers to ESG Goals

Sustainability-Linked Products Are Increasingly Popular Sustainability-linked loans (SLLs) and bonds (SLBs) are growing in popularity among corporates as a tool to raise capital while publicly declaring their intention to improve environmental or social performance targets…

SUSTAINABLE INSIGHT / Tue 03 Nov, 2020

Green Finance Expands to Support China's Transition to Low Carbon Emissions

Fitch Ratings expects China’s green finance market to be an important tool for policymakers to achieve the country’s pledge to reach net-zero carbon emissions by 2060. New policies and incentives have continued to emerge despite the coronavirus pandemic, with financial regulators setting policy goals to address climate change through investment and financing in China's next Five-Year Plan…

SUSTAINABLE INSIGHT / Tue 03 Nov, 2020

Growing Protection Gap for Physical Climate Risks

Insurers’ risk models are increasingly sophisticated, but their products cater towards compensation for individual events. Fitch Ratings believes that the longer-term climate risks to key real-estate markets are rarely priced in bonds or their underlying property insurance costs…

SUSTAINABLE INSIGHT / Thu 22 Oct, 2020

Constraints to Growth in Water-Stressed Regions - Many More Regions Will Become Water-Stressed, Imposing Substantial Adjustment Costs

As an inherently local resource, water is subject to a high degree of political and socioeconomic pressure, as well as competition at the local level, which often exacerbates the challenge of managing resources sustainably…

SUSTAINABLE INSIGHT / Tue 15 Sep, 2020

Financial Sector Confronts Deforestation as a Key ESG Risk

Loss of natural forests as a result of clearing for agricultural and forestry use is growing across the world. This has a number of environmental effects and contributes to increased carbon emissions, biodiversity loss, and climate change…

SUSTAINABLE INSIGHT / Wed 09 Sep, 2020

Tightening Climate Policy to Drive Carbon Offsetting and Emissions Trading

Global carbon trading jumped to a record high of USD214 billion in 2019 as prices rose on current or expected tightening of regulation –an annual increase of more than a third. The EU’s Emissions Trading Scheme (ETS) made up about 80% of this volume, and the rollout of China’s national ETS is likely to increase this further…

SUSTAINABLE INSIGHT / Thu 23 Jul, 2020

ESG Credit Quarterly: 2Q20

ESG Seldom a Key Rating Driver in 2Q20 ESG factors were rarely a driver of rating changes in 2Q20, with widespread negative rating actions predominantly caused by liquidity issues and rising leverage as a result of the pandemic…

SUSTAINABLE INSIGHT / Tue 23 Jun, 2020

Water Risk in the Agricultural Supply Chain

Agribusiness is highly dependent on water, with 70% of the world’s freshwater supplies used in agricultural production. Climate change (leading to changes in precipitation, flooding and extreme weather events) presents challenges to the industry’s water access, while economic and demographic shifts are likely to increase competition between domestic and industrial users…

SUSTAINABLE INSIGHT / Mon 06 Jun, 2020

Emerging ESG Risks in the Metals and Mining Value Chain: A Joint Special Report from Fitch Ratings and CRU

Several high-profile mining disasters and emissions controversies in recent years have increased investor scrutiny of ESG risks…

SUSTAINABLE INSIGHT / Mon 20 Apr, 2020

ESG Credit Quarterly: 1Q20

Since Fitch Ratings launched ESG relevance scores (ESG.RS) in early 2019, 2.1% of corporates and 1.7% of financial institutions have seen an increase in impact on credit ratings from ESG factors, from no or low impact…

SUSTAINABLE INSIGHT / Mon 17 Feb, 2020

Industry Faces Climate Transition Challenge: Disruption from Rising Costs, Regulation to Accelerate in 2020s

Mitigating emissions from the manufacture of cement, steel, ammonia fertilizers and ethylene is challenging and costly. Strong political pressure to do so could have uneven impacts on producers and assets. Around half of industrial carbon emissions relate to these activities, with feedstocks and fuel use the major sources of emissions…

SUSTAINABLE INSIGHT / Tue 07 Jan, 2020

ESG Bites into Banks' Lending to Corporates

This report is part of a series examining how environmental, social and governance (ESG) considerations are being incorporated into banks’ risk, financing, and prudential supervision frameworks. Fitch Ratings’ analysis includes 182 responses to a survey fielded during the third quarter of 2019. We review how ESG-related con…

SUSTAINABLE INSIGHT / Thu 19 Dec, 2019

ESG Credit Trends 2020

ESG Considerations Tilt Financing Landscape ESG-driven risk allocation decisions from banks and investors are affecting the ability of corporates to refinance, in at least one instance even driving credit rating downgrades…

SUSTAINABLE INSIGHT / Wed 04 Dec, 2019

Banks' Risk Management Embraces ESG

This is the first in a series of reports examining how ESG considerations are being incorporated into banks’ risk, financing, and prudential supervision frameworks. Our analysis includes 182 responses to a survey fielded during the third quarter of 2019. Fitch Ratings is interested in assessing how banks are placed to meet…

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