ESG in credit risk workshop series

The PRI's ESG in credit risk and ratings initiative brought, for the first time, voices from the corporate side into the conversation on how to better incorporate ESG factors into credit analysis.

The articles below summarise some of the key points arising from a series of workshops that saw credit analysts from the buy and sell side as well as credit rating agencies (CRAs) engage with representatives from debt issuers’ corporate finance departments. It follows a series of 21 forums that the PRI organised from September 2017 to September 2019 to nurture an investor-CRA dialogue to promote a transparent and systematic consideration of ESG factors in credit risk assessment.

Workshop summaries

  • ESG in credit risk: Workshop with insurance companies

    2022-05-04T09:41:00+01:00

    Corporate bond investors and analysts met with two life insurance groups and discussed issues including the importance of good corporate governance in the sector and the societal cost of the energy transition.

  • ESG in credit risk: Workshop with North American banks

    2022-03-10T00:01:00+00:00

    Credit analysts met with six representatives from four US and Canadian banks to discuss the importance of good governance, the challenges for banks in gauging clients’ climate exposure, and their concerns over sustainable finance regulation.

  • ESG in credit risk: Workshop with UK banks

    2022-01-27T11:52:00+00:00

    Credit analysts met with seven representatives from four UK banks to discuss governance and litigation risk, climate change and the net-zero transition, and the prospects for new financing structures such as social bonds.

  • ESG in credit risk: Workshop with EU banks

    2021-11-17T18:07:00+00:00

    Credit analysts met with 14 representatives from eight EU banks to discuss the importance of good governance, the increased focus on cybersecurity and the new Sustainable Finance Disclosure Regulation

  • ESG in credit risk: Workshop with utilities companies

    2021-10-14T10:34:00+01:00

    Corporate bond investors and analysts met with eight companies from the utilities sector to discuss progress on capturing ESG opportunities and mitigating risks. Discussions focused on the financial materiality of ESG, and the expected impact of utilities’ sustainability efforts on their creditworthiness.

  • ESG in credit risk: Workshop with borrowers in the chemical sector

    2021-06-22T16:06:00+01:00

    Credit analysts met with seven companies from the chemical sector to discuss energy usage and targets, plastics recycling and the need to transition to a sustainable economy.

  • ESG in credit risk: Workshop with sub-investment grade borrowers (Part 3)

    2021-05-19T14:10:00+01:00

    Credit analysts met with seven companies from the transport and healthcare sectors to discuss ESG engagement and disclosure in the high-yield market. Discussions centred around the need for standardised data and the role of third-party ESG ratings providers.

  • ESG in credit risk: Workshop with borrowers in the food value chain

    2021-03-24T13:22:00+00:00

    Credit analysts met with eleven companies from the food value chain to discuss deforestation as it affects soft commodities like palm oil, soy and cattle. Discussions focused on establishing the connection between good ESG practices and cheaper debt.

  • ESG in credit risk: Workshop with borrowers in the mining sector

    2021-02-11T15:24:00+00:00

    Credit analysts met with four mining companies to discuss the sector’s transition from a ‘dirty industry’ facing multiple ESG risks, to a more sustainable business model. Discussions focused on analysts’ and companies’ differing assessments of the issues that pose the biggest financial risks.

  • ESG in credit risk: Workshop with sub-investment grade borrowers (Part 2a)

    2021-01-28T14:13:00+00:00

    Credit analysts met with 20 companies in a range of sectors to discuss ESG engagement and disclosure in the high-yield market. This is the first of two linked reports covering different aspects of their discussions.

  • ESG in credit risk: Workshop with sub-investment grade borrowers (Part 2b)

    2021-01-28T14:12:00+00:00

    Credit analysts met with 20 companies in a range of sectors to discuss ESG engagement and disclosure in the high-yield market. This is the second of two linked reports covering different aspects of their discussions.

  • ESG in credit risk: Workshop with Swiss issuers

    2020-12-10T14:17:00+00:00

    This workshop featured four companies from the chemical, financial and food sectors. It was attended by 17 investors from 13 organisations, as well as representatives from seven CRAs and several industry associations.

  • ESG in credit risk: Workshop with French sub-investment grade borrowers

    2020-11-25T14:20:00+00:00

    Corporate bond investors met with five French companies in the facilities-management, debt repurchasing, retail, rental and shipping sectors. Six credit ratings agencies and 34 investor and bank analysts also participated.

  • ESG in credit risk: Workshop on ESG disclosure in leveraged finance

    2020-11-12T14:22:00+00:00

    This workshop convened key market participants – including fixed income investors, borrowers, bankers, lawyers, credit rating agencies and private equity sponsors – to discuss the rationale and the importance of company disclosure of ESG information and data.

  • ESG in credit risk: Workshop with sub-investment grade borrowers (Part 1)

    2020-09-29T10:21:00+01:00

    Corporate bond investors met with 13 companies from the debt repurchasing, healthcare, telecoms and paper and packaging sectors. Three credit ratings agencies also participated. The discussions explored whether credit ratings impact on companies’ consideration of ESG in their businesses, and on how investors assess them.

  • ESG in credit risk: Workshop with French companies

    2019-12-02T14:29:00+00:00

    Corporate bond investors met with four blue-chip French companies - Danone, Klépierre, Sanofi and Total - to discuss how to better incorporate ESG into credit analysis. Four ratings agencies also joined the workshop.