Norway's Cicero retained its title as External assessment provider of the Year for the third consecutive year, although this time the award went to its new subsidiary – Cicero Shades of Green.
The parent non-profit research institute – the Centre for International Climate and Environmental Research in Oslo – is a market pioneer, having delivered the second party opinion (SPO) on the first labelled green bond (from the World Bank) in 2008. It has since rated more than 100 bonds from a broad range of issuers, including the first green sukuk in 2017.
The ratings are based on a proprietary methodology which assigns a 'dark green', 'medium green' or 'light green' label to each issue. Cicero claims that this approach gives an independent, holistic assessment of climate risk based on the latest science.
Christa Clapp, partner and co-founder of the new subsidiary, says it will use the same methodology but will provide a more professional structure for second opinion work, "which is inherently different in nature [from] multi-year research projects".
Although it was not the most prolific of external reviewers last year, one judge said the company provides "the most credible of second party opinions". Another said it "stands out as an external assessment provider with a high quality, science-based approach and very informative SPOs".
A notable development in 2018 was the company's first review of a sustainability bond framework – from the Agricultural Development Bank of China. Cicero assigned the green bond component –– a 'deep green' rating but, after incorporating an analysis of the potential social impacts of the eligible assets from the International Institute for Sustainable Development (IISD), it gave a 'medium green' assessment to the overall sustainability bond framework.
The ability to call on the technical and regional expertise of other research institutions is a Cicero strength. In addition to the IISD, its network includes the Stockholm Environment Institute, the Basque Center for Climate Change and Tsinghua University's Institute of Energy, Environment and Economy.