Sustainalytics Insight: Second Party Opinions a Primary Focus
Morningstar Sustainalytics, a recognized global leader in the Second Party Opinions (SPO) market for sustainable fixed income analysis, is enhancing its SPO assessment framework based on feedback and input from clients and market participants.
These enhancements are reflected in the new Morningstar Sustainalytics SPO report format, which the company plans to begin putting into practice starting April 15.
The report includes a number of enhancements in how the global sustainability risk, ratings and research provider assesses sustainable bond frameworks and presents these assessments to the market:
- A new sustainability contribution signal, which goes beyond principles alignment to offering granular insights on expected impact using a transparent, science-based approach.
- A four-level system, which combines environmental and social contribution with avoidance of harm criteria to provide transparency and help mitigate greenwashing concerns.
- A context aware assessment that recognizes companies operating in hard-to-abate sectors and their unique challenges, to ensure that all activities with transition potential are evaluated for their progress toward long-term sustainability.
- Focus on impact over labels, taking a deeper look at a framework’s intended contributions across many sustainability dimensions, both environmental and social.
According to Barbara Lambotte, Head of Sustainable Fixed Income Research at Morningstar Sustainalytics, “Our new approach is an exciting step forward, moving our nuanced, contextual analysis into an intuitive easy to compare signal that supports the insights the sustainable fixed income market is seeking.”
Added Kevin Ranney, Morningstar Sustainalytics Senior Director of Sustainable Fixed Income Research, Standards & Guidance, “this is an important step in the evolution of our product offering to help investors make decisions that support the achievement of their sustainability goals.”
To speak in more detail with Barbara or Kevin, reach out to Tim Benedict at tim.benedict@morningstar.com or (203) 339-1912.
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