(Image credit: Eduardo Ruíz.)
S&P Global Ratings, a division of S&P Global Inc. (New York) will increase collaboration with Guidewire Software (Foster City, Calif), using the company’s Cyence Risk Analytics to help inform the cyber security factors of the governance component in the new S&P Global Ratings Environmental, Social and Governance (ESG) Evaluation. Separate from credit ratings, the ESG Evaluation is a cross-sector, relative analysis of an entity’s capacity to operate successfully in the future and is grounded in how ESG factors could affect stakeholders and potentially lead to a material direct or indirect financial impact on the entity.
S&P Global Ratings’ ESG Evaluation offering enables investors, companies and governments to evaluate the performance of entities, investments and supply chains, through the categorization of various ESG metrics to assess ESG risks and make strategic decisions for long-term sustainable growth.
Guidewire Cyence Risk Analytics’ cyber risk experience and insights will help inform parts of the governance analysis in the ESG Evaluation product. The offering will power S&P Global Ratings360, a digital delivery platform that provides a view of a company’s critical credit risk factors, according to a joint statement. Last year, S&P Global Ratings and Guidewire first announced their intention to bring the cyber risk knowledge and insights of Cyence to S&P Global Ratings360.
“The ESG Market continues to grow in strategic importance for our customers, investors and market participants, therefore, we have developed a solution to evaluate the expanding risk components of ESG,” comments Chris Heusler, Chief Commercial Officer, S&P Global Ratings. “The continued collaboration with Guidewire enables us to attain deeper levels of cyber risk insights and knowledge when developing an ESG Evaluation and sets us apart from many other providers in this field. Our ESG Evaluation offering as a whole has been designed to be a natural extension of our Ratings360 platform which serves our customers in assessing multi-dimensional credit risk attributes.”
The Rise of ESG
ESG factors are increasingly used by investors in addition to business fundamentals in order to assess entities, the joint statement notes. However, the statement adds, lack of consistency, standards, and forward view of the majority of ESG information providers result in widespread difficulties for investors looking to integrate ESG factors into their investment decisions.
“We are excited to bring the power of our proprietary cyber data and analytical capabilities to the S&P Global Ratings’ ESG Evaluation product,” comments Paul Mang, General Manager, Analytics and Data Services, Guidewire Software. “Guidewire’s Cyence Risk Analytics model provides distinctive insights to ESG customers who seek to understand the economic implications associated with cyber risk exposures. In the technology-centric world in which we live, the need for these insights—to make well-informed investment decisions—continues to grow.”