Rating-Agentur Expert RA GmbH is a signatory of the ESG in Credit Rating Statement maintained by the UNPRI. The Agency recognizes that environmental, social and governance (ESG) factors can affect borrowers’ cash flows and the likelihood that they will default on their debt obligations.

To which extent do our credit ratings comply with ESG?

Even though the credit rating analysis conducted by the Agency is mainly focused on assessing the rated entity’s creditworthiness position, it also includes a number of parameters aimed at considering the environmental, social and governance (ESG) strengths and weaknesses of the rated entities.
Our credit rating methodologies for financial and non-financial corporates consider the governance metrics in a special section where the risks management and the ownership characteristics are assessed. Environmental and social parameters are mainly considered in cases of strong risks or opportunities as stress or support factors. The methodology for regions covers the social and governance section very deeply in two parts: the social and economic risk analysis section and political risk analysis section. However, the environmental strengths and weaknesses are considered mainly in special cases through stress or support factors.
Event though we incorporate ESG parameters in our credit ratings these metrics are present in our credit rating assessment up to a limited extent. In order to address this issue and assess ESG parameters fully without distorting the meaning of classic credit ratings we developed a separate special product – ESG Rating.

ESG Rating

An ESG rating represents the opinion of the Agency on the environmental, social and governance strengths and weaknesses of a rated entity. These ratings allow to compare an entity’s performance with other peers and can be used by investors in the process of investment decision making and in the course of responsible investment portfolio selection. Furthermore, these ratings can be used by the rated entities as well as the general public to assess the entity’s ESG risks and opportunities.

Note: ESG ratings are not considered as credit ratings under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies.

ESG and Sustainable Finance in Russia

Russian market recently joined ESG and Sustainable Finance initiatives with issuing the first green bonds, first ESG ratings assigned to Russian companies and banks, as well as creation of Sustainability section on Moscow Exchange. All of these activities were supported by RAEX-Europe.

In order to help Russian Sustainable Finance Market to be in line with global trends and standards, in 2020 RAEX-Europe launched a cycle of educational webinars in Russian language, covering responsible investment and sustainable development topics.

We invite you to watch our introductory video on YouTube and our webinars:

RAEX Sustainability Webinar 1 - Green Bonds Market

RAEX Sustainability Webinar 2 - Green Bonds Verification

RAEX Sustainability Webinar 3 - Issue of Green Bonds on the Moscow Exchange