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Moody’s says green tech, ESG and sustainability requirements will shape credit outlook in 2024

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on South China Morning Post or enjoy below:

🗞️ Driving the news: Moody's Investors Service reports that green technology, climate financing, and sustainability disclosure requirements will significantly influence credit ratings in 2024
Environmental, Social, and Governance (ESG) considerations are becoming increasingly important in assessing the credit strength of numerous debt issuers

🔭 The context: The report highlights key ESG themes and their potential short to medium-term credit risks
While green technology and innovation are pivotal, economic and geopolitical challenges may impede progress towards net-zero goals
The global push for rapid decarbonization faces headwinds from high interest rates and slow growth

🌍 Why it matters for the planet: This shift in credit assessment underscores the growing importance of sustainability in the financial sector
The move towards green investment, driven by policy support and evolving market dynamics, reflects a broader trend towards a sustainable and low-carbon global economy

⏭️ What's next: The evolving credit landscape suggests a challenging but essential transition for businesses, especially in carbon-intensive sectors
Companies worldwide will need to navigate complex ESG policies and adapt to mandatory climate and sustainability disclosures

💬 One quote: "The overarching trend of energy transition in the medium and long term has not changed," (Ken Liu, Head of China and Hong Kong utilities research, UBS)

📈 One stat: Only about 4% of 485 listed non-financial companies in mainland China and Hong Kong have set specific decarbonization targets as of May 2023, compared to approximately 29.5% in Europe

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