For ESG raters, clearer skies still signal stasis
As Covid-19 tamps down environmental risk, rating agencies are unmoving on ESG scoring
A rising trend among corporates is to enter into loans and, more recently, interest rate hedges, where interest payments are conditional upon meeting pre-set environmental, social and governance targets. Covid-19’s impact on the environment has undoubtedly made these targets easier to hit. And companies with interest rates on their debt and derivatives linked to these targets are set to benefit.
But, while some believe ESG rating agencies might need to tweak their methodology to take the
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