Service aims to help investors, underwriters, and corporations in high carbon-emitting industries
ESG research firm Sustainalytics has announced a new Transition Bond Second-Party Opinion Service to underwriters and new corporate issuers aiming to decarbonize their economic activities along pathways consistent with international goals of net-zero carbon emissions by 2050.
“High-emitting industries and companies have a critical role to play in the transition toward net-zero carbon emissions," said Kevin Ranney, Director of Sustainable Finance Solutions at Sustainalytics. “Transition finance is helping to incentivize the allocation of capital toward the development of low-carbon solutions.”
The service assesses transition bonds based on industry-specific criteria for transition-eligible activities.
It relies on a two-dimension framework that considers both issuance-level considerations, which concern how the use of proceeds align with transition goals, and issuer-level considerations, which focus on an issuer’s strategy and commitment to a transition pathway.
In accordance with market demand, the service is initially focusing on companies in the natural gas and steel industries. It will be expanded over the next several months to include companies in a host of other industries including marine shipping, aviation, cement, and aluminum.
“We look forward to working with underwriters and new corporate issuers to accelerate transition finance activities in the market globally,” Ranney said.
