KBRA Releases Research – States: KBRA’s Framework for Incorporating ESG Risk Management in Credit Ratings

Kroll Bond Rating Agency (KBRA) releases research on our approach to incorporating environmental, social, and governance (ESG) factors in the credit rating process for U.S. states.

This report is a follow-up to a research publication on KBRA’s general approach to ESG factors in our credit rating process across corporate, financial, and government (CFG) ratings, which we describe as ESG Management. While our previous publication provided a broad overview of KBRA’s ESG Management approach, this research report focuses on the potential influence of ESG topics on KBRA’s analysis of state ratings. Not only do states need to respond to ESG issues that affect them directly, but they also have the responsibility to facilitate and lead their local governments’ response to ESG risks and opportunities. For states, ESG factors may include the infrastructure required to address the impact of climate change, cybersecurity threats, preservation of clean water and sanitation, production of clean energy, and sufficient development of affordable housing, among other concerns.

Click here to view the report.

Related Publications

• ESG Global Rating Methodology
• Cybersecurity and Credit Risk

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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