Kroll Bond Rating Agency (KBRA) releases a research report focused on environmental, social, and governance (ESG) topics and their potential influence on KBRA’s analysis of financial institutions. This report is a follow-up to a recent research publication on how ESG factors are considered in KBRA’s credit rating process across corporate, financial, and government (CFG) ratings.
KBRA believes that ESG factors that impact credit risk are best examined through the lens of risk management analysis for financial institutions. Under our ESG Management framework, we seek to understand the ways that a financial institution’s management team can identify, address, and mitigate relevant ESG risks (or capitalize on opportunities), and/or the ways a specific transaction structure can mitigate these risks. As we gather data on relevant ESG considerations for our rated universe, we believe the most effective way to communicate our findings is in our rating and surveillance reports. In addition to the unique ESG risks related to each specific debt issue or issuer, the ESG Management analysis increasingly includes a review of broadly relevant topics such as climate risk, stakeholder preferences, and reputation risk.
Click here to view the report.
KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.
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