Credit ratings, research, and risk analysis provider Moody’s Investors Service announced today the expansion of its ESG profile and credit impact scores across several corporate and government sectors. The new sectors include global pharmas, medical device companies, regulated electric and gas utilities with generation, U.S. states and large U.S. cities and counties.

With the new publications, Moody’s will now integrate ESG considerations into the credit analysis of the sectors, including each sector’s risk exposure and the degree of credit impact. The publication follows the launch earlier this year of ESG and credit impact scores for sovereigns.

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.

The reports found that ESG factors have a mostly neutral to low credit impact on U.S. states, cities and counties, a negative to neutral impact on global medical products and devices issuers, and regulated electric and gas utilities, and on overall credit negative impact on global pharmas. The main risks highlighted for the pharmaceutical companies included litigation and policy efforts to rein in drug prices to protect consumers, while utilities were primarily exposed to physical climate risks and carbon transition issues.

Brian Cahill, Managing Director of Environmental, Social and Governance at Moody’s Investors Service, said:

“Our rollout of ESG issuer profile and credit impact scores across more sectors assists in the transparent and more formalized evaluation of the influence of ESG considerations on credit risk.”

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