How ESG Affected Corporate Credit Risk and Performance

Rohit Mendiratta, Hitendra D. Varsani, Guido Giese

2021 | Practitioner | Credit Risk, ESG Ratings, Fixed Income, Risk & Performance

The authors found ESG ratings had characteristics distinct from credit ratings and delivered additional insights into risk and performance: Higher-ESG-rated issuers tended to have stronger cash flow metrics, lower levels of ex ante risk, and less-frequent severe incidents than lower-ESG-rated issuers.