special-reports Ratings /ratings/en/research-insights/special-reports/sustainability-insights content esgSubNav

Sustainability Insights

S&P Global Ratings’ sustainability insights aim at advancing the understanding of sustainability topics related to environment, social and governance.

Sustainability Focus Series

Watch our replay in which S&P Global Ratings’ sustainable finance analysts presented the rationale for, and the characteristics of, the revised analytical approach. This updated methodology for Use of Proceeds financing combines important features of the existing methodologies from S&P Global Ratings and Shades of Green, following S&P Global’s acquisition of Shades of Green from CICERO climate research foundation.

Latest Research                                                                                                                                                              ALL INSIGHTS

Lost Water: Challenges And Opportunities

In this research, S&P Global Ratings looks at water infrastructure challenges through the lens of non-revenue water (NRW), meaning water that a utility sources and treats but for which it receives no financial compensation. NRW, or lost water, deters investment in water infrastructure assets. Reducing it can have many benefits, including increasing universal access to safe water, mitigating water stress, reducing the impacts of freshwater withdrawals on ecosystems, and mitigating global greenhouse gas emissions. Investment decisions made today could significantly affect future NRW rates. Yet, in many cases--particularly emerging markets--access to private-sector funding is limited and regulatory incentives are insufficient.

Read More

Building Energy Regulations And The Potential Impact On European RMBS

We conducted a scenario analysis of properties in the U.K. (focusing on England and Wales), Ireland, France, and the Netherlands, where energy performance certificates (EPCs) indicate low energy efficiency (for example classes F and G). We found that climate transition risks linked to changes in energy-efficiency performance regulations currently have a limited impact on European RMBS. This is due to uncertainties on the timing and extent of sale or rental restrictions, financing available for renovations, supply and demand in housing markets, and structural protections in RMBS transactions. Studies show there is a valuation discount for properties with low EPC classes. We found there is a low potential impact of this on our modelled loss severity assumptions, even though energy-intensive properties could face higher losses. Our weighted-average loss severity increases 2.5% at the 'AAA' rating level and 2.8% at the 'B' rating level, albeit our assumptions are very conservative.

Read More

Materiality                                                                                                                                                                                Access S&P Global Ratings ESG Materiality Map

Materiality Mapping: Providing Insights Into The Relative Materiality Of ESG Factors

As part of this joint research between S&P Global Ratings and S&P Global Sustainable 1, we have reviewed a common set of material ESG factors for the analysis of entities and sectors, looking at how ESG issues could affect stakeholders, potentially leading to material direct or indirect financial impacts on entities. − Some ESG factors may only have the potential to yield a financial impact. Some others may have limited financial impact while the impact on stakeholders is high. − The materiality mapping exercise at the sector level can help assess this potential and the relative magnitude of the impact. It can also help evaluate the relative materiality of ESG factors, which a materiality map could graphically represent. − The effective realization of financial impact is evolving, dynamic, and inherently uncertain. Therefore, for the purposes of this mapping exercise, we will take a forwardlooking view of the materiality of an ESG factor on financial performance. − We observe that the financial impact of ESG factors is most often realized through four main drivers related to public awareness, regulations, legal actions, and accounting methods. These are not exhaustive or mutually exclusive, but interact with each other.


Download PDF

Sustainable Finance

Global Sustainable Bonds 2023 Issuance To Exceed $900 Billion

Despite stagnating global bond issuance, we anticipate that GSSSB issuance should be in line with our forecast of $900 billion to $1 trillion, or 14% to 16% of total issuance, in 2023. We anticipate issuance of sustainability-linked bonds will decline in 2023 as questions regarding the credibility of targets persist, while green bonds will continue to dominate the GSSSB market, building on a record level of issuance in the first half of the year. Europe will remain the leading region for GSSSBs, while North American issuance may be hampered by lower supply and demand for the remainder of the year. Emerging markets may see increased issuance in the coming year.

Read More


U.S. Inflation Reduction Act Highlights Diverging Approaches With Europe ​

The U.S. Inflation Reduction Act (the act or law) is proving consequential in the likelihood it will turbocharge renewables development and the broader goal of a net-zero future. The act's subsidies and incentives could shift production to the U.S. for tax reasons, emphasizing the EU’s competitiveness concerns, as it was already under pressure from energy price differentials triggered by the Russia-Ukraine war. Certain segments in the power sector, autos, midstream utilities, agribusiness, and health care may experience positive credit impacts from improved cash flows and reduced development and technology costs for renewables and carbon capture.

Read More

What We're Watching

S&P Global Ratings believes 2023 will begin as a journey through intensifying credit pressures, leading to (if all goes well) more stable financing conditions by year-end.


Lai Ly

Global Head Of Sustainability Research

S&P Global Ratings

E. lai.ly@spglobal.com