ESG Assessments

Corporate ESG Assessments

Investing responsibly, or considering environmental, social and corporate governance (ESG) criteria in the credit underwriting process, can generate long-term competitive financial returns and positive societal impact.

All the latest regulations place a significant emphasis on embedding ESG risks in the credit underwriting process. Responsible investment should also consider the impacts of megatrends (e.g. climate change), and emerging regulations or voluntary guidelines, as well as the requirements of wider stakeholders for transparency.

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How can we add value to your business decisions?

Net Zero Analytics has extensive experience with assessing and managing ESG risks, and can help you structure and improve your own Due Diligence processes, or conduct a Due Diligence to uncover social, ethical, environmental and safety risks associated with a specific acquisition, or investment. Understanding the risks can help assess the costs and attribute value related to the investment.

We prepare ESG assessments to help financial institutions understand environmental and human rights issues, for example when financing companies in sensitive sectors.

ESG assessments for Financial Institutions' borrowers

Assessments for borrowers

Assessments for projects or large investments

Our ESG assessment takes into account the activity, fixed assets, supply chain, etc. The ESG assessment and rating is valid for a certain period of time (we recommend 1 year). No matter how many times the relationship manager submits a proposal to the credit committee, it uses the same ESG assessment as long as it is valid (unless the credit committee has requested an update).

Regardless of the borrower ESG assessment, an ESG assessment is issued for the specific project taking into account the business plan, blueprints, licenses, etc. The ESG assessment is updated at regular intervals according to the instructions of the bank, until the completion of the project when also a final rating is given.

You get tangible outcomes. These include:

Provide an overview of the risks and hidden factors of your customer or investment
Summarize deficiencies in compliance with laws and regulations and customer demands
Help you better plan the integration of ESG criteria in the general due diligence process
Prioritize expected cost related to improvement areas
Methodology founded on a structured and robust methodology for documenting ESG Due Diligence and risk assessment
Rely on necessary local expertise to ensure rapid and correct information

Green Bond Assessments

Green Bond Assessments are not credit ratings and they apply to bond issues rather than to the bond issuers. We have our own methodology for assessing green bonds, which are fixed-income securities, both taxable and tax exempt, that raise capital for use in financing or refinancing projects and or activities with specific climate or environmental sustainability purposes. The Green Bonds Assessment provides an evaluation of the bond issuer’s management, administration, allocation of proceeds to and reporting on environmental projects financed with the proceeds derived from green bond offerings. Our assessment process will score each bond issue on various factors, weighted to reflect their relative importance, to arrive at a composite grade. The composite grade, in turn, will inform an overall assessment that runs from AAA (low risk) to C (high risk). After a Green Bond Assessment is initially assigned, it may be refreshed periodically, based on information provided in the issuer’s subsequently issued periodic reports.