ESG Is Increasingly Important in Credit Ratings, Moody’s Says

Moody’s Investors Service is paying more attention to environmental and social issues when assessing companies’ risk as the financial impact becomes clearer. Climate and demographic change, as well as societal issues like income inequality, are increasingly highlighted, Moody’s analysts led by Robard Williams wrote in a report Monday.

“We expect ESG considerations to be of growing importance in our assessment of issuer credit quality,” the Moody’s analysts wrote. “While our ratings have always reflected our views of ESG risks, the materiality of key environmental and social issues continues to increase.”

Moody’s cited ESG risks as material credit considerations in 33% ...