Sustainable Fitch has undertaken a study on the introductory cohort of 220 ESG Entity Ratings it assigned. ESG Ratings derive from an analysis of actions, outcomes, impacts and activities, in addition to policies and broader commitments.

The introductory cohort has an average framework score of 74 and an average entity score of 58 on a scale of 0-100. This means that issuers are doing a good job aligning their ESG labelled bonds to international best practices, but their business activities only have average sustainability performance.

On a regional level, entities from EMEA have an average ESG score of 60, showing slightly better sustainability profiles than those in Asia-Pacific and the Americas.

On a sector level, water and wastewater utilities have the highest average entity scores. At the same time, airports have the lowest due to their customers consuming fossil-based aviation fuel.

The food and beverage sector has the lowest business activities score (39) and the lowest ‘E’ sub-score (31) due to GHG emissions, deforestation, land use change and water source pressures.

Looking at ESG Ratings on an aggregate level that enable a cross-comparison of the sector and regional trends as they pertain to environmental or social impacts yields valuable, contextual insights for investors.