Fitch Group has launched Sustainable Fitch, which will offer a comprehensive range of ESG ratings products at both an entity and instrument level for all asset classes globally.
The ESG Ratings coverage will initially be focused on the ESG-labelled market, but in time will comprise the entire fixed-income investable universe.
Sustainable Fitch believes it will be able to offer the broadest coverage from a single provider in the ESG information market.
The new ESG Ratings will source data derived using the same principles and platforms that underpin Fitch credit ratings.
The ratings agency said they provide an objective, full assessment of ESG performance at entity, instrument and framework level, allowing for detailed comparability.
Sustainable Fitch’s offering will include ESG-integrated credit research and analysis via existing ESG Relevance Scores as well as climate risk assessment through its existing Climate Vulnerability Scores.
It will also provide pure ESG analysis and reports via the new ESG Ratings and ongoing sector and thematic ESG research.
Coverage will not be limited to the Fitch credit ratings universe or the existing universe of green or sustainable-linked bonds.
The ratings will be paid for by investors rather than issuers, meaning the product will adopt a business model more like ESG rating firms such as MSCI and Sustainalytics.
Currently, in the sustainable bonds markets, external assessments such as second-party opinions are paid for by issuers.
The creation of Sustainable Fitch builds on the successful 2019 launch of Fitch Ratings ESG Relevance Scores, which show the impact of ESG factors on credit rating decisions and are now maintained on over 10,500 issuers and transactions.
Sustainable Fitch will be headed by Andrew Steel, Managing Director, Global Group Head of Sustainable Finance.
“Investors want transparent, cross comparable ESG ratings that look beyond labelling or targets to assess ESG fundamentals,” said Steel.
He added, “Sustainable Fitch will provide investors with best-in-class ESG Ratings, supported by data and analysis backed by the key tenets of consistency, comparability, coverage and granularity.”
Paul Taylor, CEO, Fitch Group, said, “We have spent a lot of time assessing what is currently available in the market, listening to and gathering feedback from investors and other market participants.
Our new ESG Ratings product is in direct response to what the market is asking for, as was the case in 2019 when we created our ESG Relevance Scores with investors in mind.”
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