Credit ratings, research, and risk analysis provider Moody’s Investors Service announced that it has expanded its ESG profile and credit impact scores to new sectors including Healthcare Services, Protein & Agriculture, and Surface Transportation & Logistics.

Moody’s integrates 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, initially focusing on sovereign issuers, and has expanded its coverage over the several months, adding sectors ranging from healthcare, utilities, apparel, media and automakers to states, cities and counties.

In its reports introducing the scores, Moody’s provided its overall assessment for each of the sectors. For healthcare services companies, ESG considerations have a moderately negative credit impact overall, driven primarily by social risks – such as customer relations, demographic and societal trends, human capital, and responsible production – with greater exposure for companies serving patients. Exposure to environmental risks is greater for companies operating in areas vulnerable to extreme weather events, and for companies utilizing transport fleets, such as healthcare product distributors.

Protein and agriculture companies were also rated as having moderately negative credit impact from ESG issues overall, with high exposure to environmental and social considerations largely offset by conservative financial strategies. Heavy reliance on land and water contribute to high environmental risk exposure for nearly all companies, with social exposures for many companies stemming from supply chain, deforestation and potential livestock contamination issues.

For surface transportation and logistics, the credit impact of ESG considerations is neutral to low or moderately negative for most companies, with highly negative exposure to environmental factors – particularly the need for trucking, rail and parcel delivery companies to reduce emissions – offset by strong governance attributes.

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