PARIS (S&P Global Ratings) --S&P Global Ratings today published "ESG Credit Indicator Definitions And Application," on RatingsDirect. This article follows our recently published methodology on environmental, social, and governance (ESG) principles in credit ratings (see "Environmental, Social, And Governance Principles In Credit Ratings," published Oct. 10, 2021).

ESG factors typically incorporate an entity's effect on and impact from the natural and social environment and the quality of its governance. However, not all ESG factors materially influence creditworthiness and, thus, credit ratings. Therefore, we define ESG credit factors as those that can materially influence the creditworthiness of a rated entity or issue and for which we have sufficient visibility and certainty to include in our credit rating analysis.

Our ESG Credit Indicators provide additional disclosure by reflecting our opinion of how material the influence of ESG factors is on the various analytical components in our rating analysis through an alphanumerical 1-5 scale. ESG Credit Indicators are applied after the ratings have been determined.

"From mid-November to December, we plan to publish these indicators for individual companies in the corporate and infrastructure, banking, and insurance sectors," noted S&P Global Ratings credit analysts Karl Nietvelt, Emmanuel Volland, and Dennis Sugrue. "And we'll cover other asset classes in 2022."

We will initially release these indicators through ESG sector report cards. Subsequently we plan to incorporate and update them in our issuer-specific rating publications to complement our existing credit rating analysis and surveillance.

This report does not constitute a rating action.

S&P Global Ratings is the world's leading provider of independent credit ratings. Our ratings are essential to driving growth, providing transparency and helping educate market participants so they can make decisions with confidence. We have more than 1 million credit ratings outstanding on government, corporate, financial sector and structured finance entities and securities. We offer an independent view of the market built on a unique combination of broad perspective and local insight. We provide our opinions and research about relative credit risk; market participants gain independent information to help support the growth of transparent, liquid debt markets worldwide.

S&P Global Ratings is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies and governments to make decisions with confidence. For more information, visit www.spglobal.com/ratings.

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