Fundamentals of ESG Credit Risk Assessment

Course Overview

This course focuses on the impact that ESG issues are having on the credit outlook for all sectors. Demonstrating how to integrate ESG into traditional credit analysis for both corporate credits and sovereign debt issuers.

With the growing realisation that material ESG risks can be key credit rating drivers and can impact the creditworthiness of an issuer, the credit rating agencies are now committing serious resources to this endeavour. In fact, many ESG issues today lie at the intersection between credit risk and ESG risk and corporations need to be seen to be managing these risks proactively.

This course focuses on how and why more and more ESG issues are impacting on the credit outlook for all sectors. It considers the different approaches taken by the major credit rating agencies and demonstrates how ESG can be integrated into traditional credit analysis. Although the focus is mainly on the analysis of corporate credits, consideration will also be given to sovereign debt issuers.

Learning Objectives

• Integrate ESG factors into credit analysis
• Differentiate between key rating drivers and non-key rating drivers
• Compare the different rating agency approaches to analysing ESG risks
• Appreciate the importance of ESG materiality maps
• Assess different ESG risk scoring approaches
• Understand the links between ESG factors and credit spreads