Companies around the world are under scrutiny--politically and from the general public--about their environmental, social, and governance (ESG) responsibilities. That's leading lenders and institutional investors to become increasingly interested in how S&P Global Ratings incorporates these factors into its corporate credit ratings and the impact they have had on our ratings. To aid transparency on these issues, we did a two-year review of social factors incorporated into our analyses and how these have affected corporate and infrastructure ratings between July 2015 and August 2017. For that period, we found 346 cases where social factors (as defined below) were explicitly identified as relevant to the rating, and 42 cases where social factors--both event-driven and those occurring over a longer time period--resulted in a change to the rating or outlook, or a CreditWatch action. The cases were spread across multiple sectors, with retail and restaurants, leisure and sports, and regulated utilities being most frequently affected over the two-year review period.

This report is part of a series of publications that discuss how we incorporate ESG factors in our credit ratings. In November 2017, we published the results of a similar lookback review of environmental and climate factors over the same time span (see "How Environmental And Climate Risks And Opportunities Factor Into Global Corporate Ratings - An Update," published Nov. 9, 2017). This study showed that environmental and climate factors contributed more frequently to rating actions than did social factors over the same period. However, when social factors were material, they were overwhelmingly negative to credit quality compared to environmental and climate factors.

We also identified where social and environmental factors play out in our Corporate Criteria Framework and highlighted how their management and oversight–the "G" in ESG, could affect our corporate credit ratings in November 2015 (see "ESG Risks In Corporate Credit Ratings – An Overview," published Nov. 16, 2015). We will continue to track how we incorporate ESG risks and opportunities into our credit analysis, and we plan to further report on how those factors may affect corporate entities' credit.