The initiative offers what the ratings agency believes will be the “broadest coverage” from a single provider in the ESG information market.
The firm’s new ESG ratings products will initially be focused on the ESG-labelled market, but in time will comprise the entire fixed-income investable universe.
Andrew Steel, managing director, global group head of sustainable finance at Fitch, will head the unit.
“Investors want transparent, cross comparable ESG ratings that look beyond labelling or targets to assess ESG fundamentals,” said Steel. “Sustainable Fitch will provide investors with best-in-class ESG ratings, supported by data and analysis backed by the key tenets of consistency, comparability, coverage and granularity.”
The ESG ratings assess the ESG performance and profile of entities and instruments. They are backed by clear methodologies, said Fitch, with source data derived using the same principles and platforms that underpin the firm’s credit ratings.
The aim of Sustainable Fitch is to help market participants evaluate the relative ESG quality of financial instruments and entities, added the rating agency.
Fundamentally, the focus of the analysis is on action, outcome, impact and activity, rather than purely on policies and broader commitments.
The ESG ratings suite assesses all types of debt instruments (bonds and loans), whether they are labelled, plain vanilla, or structured instruments. The suite also covers any type of entity: corporate; leveraged finance; financial institution; sovereign, supranational and agency; project finance; public finance; and structured finance.