KBRA Releases Research – Infrastructure: 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 infrastructure companies.

Key Takeaways

• Climate change is likely to affect different assets in various ways, creating opportunities for some issuers and risks for others.
• Technological changes linked to carbon reduction and carbon capture may result in higher capital expenditures as companies adapt to their end users’ needs and regulatory changes.
• Stakeholder views on a company’s board composition, executive compensation policies, supply chain management, tax strategy, or cybersecurity systems, have the potential to affect a company’s reputation and its ability to access capital, which is a key credit risk.
• KBRA evaluates the issuer’s risk management policies, potential regulatory changes, and cybersecurity plans as part of the governance factor.

Click here to view the report.

Related Publications

• ESG Global Rating Methodology
• Credit Ratings Deserve ESG Risk Analysis, Not ESG Scores

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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