Acuite Ratings to incorporate ESG norms into its credit ratings
Acuité Ratings & Research Ltd, a domestic rating, will incorporate Environmental, Social, and Governance (ESG) norms into its credit ratings and analysis in a systematic and transparent manner. It is the first rating outfit from India to sign a United Nations supported initiative for the Principles for Responsible Investment (PRI). In January 2021, Acuité set up subsidiary ESG Risk Assessments & Insights to make assessments for investors and corporates.
ESG in Credit Risk and Ratings Statement” is supported by over 170 investors who have nearly $40 trillion Assets Under Management (AUM) ) and 27 credit rating agencies (CRAs) over the world. It is increasingly visible that impaired assets linked to climate change or questionable accounting practices in the corporate sector can cause operational inefficiencies and regulatory headwinds. It could also lead to adverse impact on reputation and significant financial losses.
For project specific bonds issued by special purpose vehicles (SPVs) by urban local bodies, factors that can result in bond price volatility and default risk include poor standards of public health and high levels of corruption.
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