Focusing on future risks and opportunities S&P Global Ratings sees its ESG Evaluation tool as offering the market a fully forward looking environmental, social and governance (ESG) assessment tool.

By assessing a company’s ESG strategy and ability to prepare for potential future risks and opportunities S&P says it is able to provide a ‘preparedness’ opinion that evaluates the entity's capacity to anticipate and adapt to a variety of long-term plausible disruptions.

A company, bank, insurer or public finance entity is assessed based on this future preparedness and a deep analytical engagement between S&P’s sustainability analysts. This engagement includes input from sector and regional specialists, the company’s senior management and a board member, as well as analysis of both public and private information.

S&P also aimed to set its ESG Evaluation apart from the rest of the market through its transparency. To do this it publishes on its website its analytical approach, how it is applied and its key sustainability factors.

ESG Evaluation is kept as up-to-date as possible to ensure the latest and most accurate ESG score is given to a company. For instance Tideway was updated in January 2022, based on its enhanced reporting practices and because it produced detailed Task Force on Climate-related Financial Disclosures (TCFD) reporting in 2021.

“Investors and financiers value the ESG Evaluation’s comprehensive assessment of the company’s ESG performance and strategy,” said Susan Gray, global head of sustainable finance business and innovation at S&P. “The consideration of preparedness is key to understanding how entities are managing future challenges such as climate transition, sector disruptions and supply chains.”

One Environmental Finance Awards judge described it as a “robust and transparent product”.

So far S&P has more than 200 ESG Evaluations either completed or underway, representing $4.6 trillion in market capitalisation across multiple sectors globally.