LATEST COMMENTARY

Investors Grapple with Stemming Biodiversity Loss

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…

NON-RATING ACTION 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 / Thurs 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…