ESG in global credit markets is increasingly relevant, according to live polls taken at an ESG conference in London held by Moody's Investors Service, which released the results Tuesday.
The Nov. 5 polling of event participants, who included leading investors, debt issuers, intermediaries and regulators, found that for 37% of them, financial materiality was the primary driver of their environmental, social and governance investment approach, while 30% cited the need to meet growing client demand, and another 15% cited a desire to manage reputational risks.
For 52% of conference respondents, the biggest challenge of integrating ESG issues into credit risk was the availability of data and disclosures.
"Moody's seeks to incorporate all material credit considerations, including ESG issues, into our credit ratings and to take the most forward-looking perspective that visibility into these risks and mitigants will permit," said Moody's analyst Ram Sri-Saravanapavaan in a statement announcing the polling results.
He also noted that "ESG considerations and their importance to issuers' credit profiles can vary widely across sectors, underscoring the need to assess materiality at an industry level."
When asked about the transition to energy sources or approaches, 42% of market participants identified policy momentum as the primary driver over the next decade and 34% identified shifting consumer preferences.