Alexandra Dimitrijevic, winner of the Market Media European Women in Finance Instinet Positive Impact Award for Sustainability, talks to Lynn Strongin Dodds about her role at S&P Global Ratings, credit research and sustainable finance.
Alexandra Dimitrijevic, winner of the Market Media European Women in Finance Instinet Positive Impact Award for Sustainability, talks to Lynn Strongin Dodds about her role at S&P Global Ratings, credit research and sustainable finance.Alexandra Dimitrijevic, Global Head of Research & Development, S&P Global Ratings and Co-chair, S&P Global Research Council, is approaching her 29th work anniversary with S&P Global Ratings, but the journey has been anything but boring. She has steadily risen in the ranks to become managing director, global head of research & development, collecting the requisite skills along the way to forge new paths for ratings research strategy across the asset class and geographical spectrum.
“I meet many women who have or had long standing careers at one company, “says Dimitrijevic, whose job at S&P has kept evolving and been her current role for over two years. “It is a sign they offer interesting challenges as well as opportunities. For example, my job has two legs – setting an innovation agenda which includes developing new insight the sustainable finance market and proving analysis on trends and risks in credit markets. This involves adopting a more thematic approach and connecting the dots between the trends at the macro, industry and credit level. “
There are definitely many moving parts with rising inflation and interest rates as well as geopolitical tensions firmly back on the agenda. The lack of clarity is also wreaking havoc with economists divided over future hikes and whether there will be a soft or hard economic landing in the US and Europe.
These trends are not novel, and the rating research tools, albeit more sophisticated today, are well established and understood. “A big part of my job is to look at these bigger themes and assess the traditional and emerging risks across regions and asset classes to help market participants make better, informed decisions,” says Dimitrijevic. “I am chair of the Credit Conditions Committee and bring together economists and credit leaders across industries to provide a top-down view of the global credit risks and their potential ratings impacts. We publish quarterly reports and I present our views to investors, the media and regulators.”
She gives the war in Ukraine as an illustration. “We looked at the energy crisis it sparked in Europe, the fears of inflation due to higher energy costs and the impact that could have on supply chains which were already affected during the pandemic,” she adds.
Dimitrijevic manages close to 100 people globally, but she is a keen proponent in buying the acumen if it is not readily available inhouse. This is the case with green and sustainable bonds which are gaining traction. In fact, figures from the International Institute of Finance show that the global ESG debt universe has surged to $4.5 trillion from $1.5 trillion two years ago.
Filling in the palette
To further bolster its expertise in the area, S&P Global bought Shades of Green last December from the Cicero Climate Foundation. The firm provides independent, research-based second party opinions (SPOs) of green, sustainability and sustainability-linked financing frameworks as well as climate risk assessments and impact reporting reviews grounded in climate science. It was one of the pioneers, providing the SPO for the first green bond framework issued by the World Bank in 2008,
SPOs are independent assessments of a company’s financing or framework’s alignment with market standards and typically provided before any borrowing is raised.
“Sustainability is very important to S&P Global,” says Dimitrijevic. “As an organisation, we participate and are involved in the TNFD (Task Force on Nature-related Financial Disclosures) and before that TFCD (Task Force for Climate Disclosures). We have built a sustainable pool of data and analytics that can be used across the company. S&P Global Ratings acquired Shades of Green because of its winning science-based methodology on green bonds and we wanted to provide strategic insights into the market globally. Our sustainable opinions are separate from our credit ones, and we recently launched an integrated suite of second party opinions which leverages the Shades of Green scale and climate expertise to assess how green a bond is.”
This has translated into four different categories, the first examining whether a financing’s documentation aligns with certain third-party published sustainable finance principles and guidelines identified by the issuer. This is followed by assigning a shade of green for green projects and evaluating the consistency of an economic activity or financial investment with a low-carbon, climate resilient future.
Next is how the financing contributes to addressing what S&P Global Ratings considers to be the issuer’s most material sustainability factors. Last but not least is looking at whether a financing is in alliance with the EU taxonomy.
Digging deeper
New tools are only part of the equation. “Covid was a real game changer in the way we led research,” she says. “There was to a degree an air of uncertainty as we were suddenly all working from home and the world suddenly came to a halt. There was a demand from the market to understand how these unprecedented circumstances could impact credit conditions.”
The response, according to Dimitrijevic was to provide transparency on how they were analysing the situation and enhance the digital communications and website, hold weekly webinars to exchange with investors, create a network of research labs focusing on specific topics. “My role is like a conductor in getting our best experts coordinated to work together to analyse and understand the risks and the impact it could have on corporate, banks and governments,” she adds.
The ability to lead, organise and motivate people is a thread running through her career. Her prior job was Head of Corporate Ratings in EMEA, managing a team of 140 analysts spanning 10 offices and covering over 1,000 credit ratings on corporate issuers across the EMEA region. The team assigned a credit rating to companies operating in multiple industries including commodities, real estate, TMT, auto and capital goods, transportation, chemicals, pharma, business services and leveraged finance.
“The last two roles I was appointed to did not exist,” she says. “They were newly created. I like the entrepreneurial part of the job where you are driving change and developing new products to meet market needs.” I feel privileged that I can align my purpose and work by bringing more insight and transparency to support the development of a more sustainable world.”
However, Dimitrijevic started at S&P Global Ratings in 1995 in a more conventional position as a public finance credit analyst before moving up as Head of Methodology for Sovereigns and Public Finance Ratings. She, she developed the methodology to assess the credit risk of sovereign governments, multilateral lending institutions, local and regional governments and public enterprises.
” When I was young, I didn’t’ have a very well-defined view about what I wanted to do,” says Dimitrijevic, who has a masters from Institut d’Etudes Politiques de Paris (Sciences Po) in Economy and Finance. “I am a daughter of an immigrant from Serbia and did not grow up in the world of finance. I chose my subjects because I thought they would put me on a solid path. I built my career from opportunities. I have been lucky in that I had strong sponsors throughout that encouraged me to take on new challenges.
© Markets Media Europe 2023
