Thus, Moody’s will integrate ESG considerations into the credit analysis of the companies, including each entity’s risk exposure and the degree of credit impact. The reports include two types of ESG scores, including issuer profile scores (IPS) and credit impact scores (CIS). IPS scores measure issuer’s exposure to ESG considerations that could be material to credit risk, while CIS gauges the impact those ESG considerations have on an issuer’s credit rating.
Moody’s initially launched the scores in January 2021, focusing on sovereign issuers, and has expanded its coverage throughout the year, adding sectors ranging from healthcare and electric and gas utilities to states, cities and counties. With recent additions, the service now covers over 1,700 rated debt issuers globally.