ESG Considerations Continue to Emerge in Credit Risk Management

Improved long-term returns and corporate reputation are key motivators in pursuing ESG

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Mar 12, 2020, 09:00 ET

NEW YORK, March 12, 2020 /PRNewswire/ -- ESG investing is increasingly playing a critical role in credit risk analysis, according to a new survey published by S&P Global Market Intelligence. Most (89%) respondents say their organization has an explicit ESG policy in place, and 83% say ESG factors are integral to what they do or are playing a growing role in the credit risk area.

The 2019 ESG Survey, which features 194 credit risk professionals working in financial services firms around the world, examines how their portfolio management processes have been evolving to account for ESG factors.

"Clients are increasingly looking to consider ESG factors as part of a holistic approach to accessing credit risk," says Whit McGraw, Managing Director and Global Head of Credit Risk Solutions at S&P Global Market Intelligence. "Our survey results reaffirm that sustainable investing is gaining traction and these ESG indicators are playing a bigger role for credit risk and portfolio management professionals."

Highlights from The S&P Global Market Intelligence 2019 ESG Survey:

ESG integration on the rise: Majority (86%) of respondents say heightened investor demand is a key influencer to consider ESG factors more fully.
Formalized approach to ESG issues: A higher percentage of APAC (63%) and EMEA (58%) respondents have a formalized responsible investment policy compared to firms in the Americas (46%).
Top three motivators for incorporating ESG considerations: Improved long-term returns, brand image and ability to identify credit quality changes.
Use of data and tools: Three quarters of respondents have internal tools and models in place, with APAC leading the charge (86%).
Barriers to greater ESG adoption: Lack of advanced tools (62%) and robust data sources (53%) as well as the cost of technology advancement (52%).
Addressing challenges: Organizations are looking to build up ESG competencies in their Credit Risk groups as well as invest in technology solutions in support of ESG credit risk management.

To access the full report, please contact pressinquiries.mi@spglobal.com.

About S&P Global Market Intelligence
At S&P Global Market Intelligence, we know that not all information is important—some of it is vital. We integrate financial and industry data, research and news into tools that help clients track performance, generate alpha, identify investment ideas, understand competitive and industry dynamics, perform valuations and assess credit risk. Investment professionals, government agencies, corporations and universities globally can gain the intelligence essential to making business and financial decisions with conviction.

S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI). For more information, visit www.spglobal.com.

SOURCE S&P Global Market Intelligence