Given the potential and high liquidity of the US municipal market, investors recognize the essential role that sub-sovereign entities can play in achieving sustainable growth. As consideration of ESG factors by Muni investors has grown in recent years, there has been more demand for reliable and comprehensive ESG assessments of US municipal market issuers.
Sub-Sovereign Risk Ratings help investors to understand a municipality’s long-term ESG risk exposure, using quantitative aggregated information to assess its current wealth and whether that wealth is at risk due to socio-economic and ESG factors. Our transparent methodology and wide-ranging ESG and wealth data provide investors with a comprehensive view of a municipality's ESG-related risks. The ratings are a strong fit for assessing US general obligation bonds but can be leveraged for any geographic construct, from broad regional to local levels.
Latest Insights
Material Matters: The Role of ESG Materiality in Sustainable Investment Strategies
Cobalt ESG Risks Threaten Electric Vehicle Supply Chain
How it Works
The rating measures sub-sovereign wealth – comprising natural, produced, human and institutional capital – and the degree to which that wealth is at risk due to socio-economic and environmental, social and governance (ESG) factors.
Wealth
Management of Wealth
Key Features and Benefits
360-Degree Evaluation of ESG-Related Risks
50 ESG and Wealth Data points form the Sub-Sovereign Risk Ratings, comprehensively covering the entity's ESG-related risks.
Absolute Scores and Interpretation
Each of the 50 ESG and Wealth Risk data points include an absolute ESG score, with a trend translation to show whether the score is improving or deteriorating.
Valuation of Sub-Sovereign Wealth
Fourteen Wealth Metrics assess natural (renewable and non-renewable), human, produced and institutional capital, providing investors with granular information on what drives municipal wealth. Our framework brings together traditional financially material metrics and our robust set of ESG metrics.
Climate Data and Physical Risks Data
Sub-Sovereign Risk Ratings provide investors with a holistic view of the entity’s exposure to and management of 11 climate-related risks, including floods, droughts, wildfires, hurricanes, and landslides.
Assessment of Governance-Related Metrics
Ten unique data points measuring municipal institutional strength and governance differentiate our rating in the market.
Coverage
Sub-Sovereign Risk Ratings cover more than 10,500 entities, across states, cities, counties and school districts.
Five Risk Levels
Sub-Sovereign Risk Ratings are categorized across five risk levels: negligible, low, medium, high and severe.
Investor Use Cases
ESG Risk Assessments
The ratings’ underlying data calls out specific risks that may expose an entity’s wealth to ESG Risks in the future, providing insights that could fortify credit risk and real estate assessments.
Screening
Identify best-in-class entities to optimize client portfolios, reflect their sustainability interests, and highlight high-risk areas and attributes.
Portfolio Management & Reporting
The Sub-Sovereign Risk Ratings enable investors to understand and manage overall ESG portfolio risk, aligning Sustainalytics’ ESG Risk Ratings with US General Obligation bonds and fixed income portfolios.
Macro- Economic Analyses
Utilize holistic assessments of ESG risks and trends to bolster evaluation of sub-sovereign performance.
Would you like to learn more? Get in touch with our team.
Why Sustainalytics?
A Single Market Standard
Consistent approach to ESG assessments across the investment spectrum.
Award-Winning Research and Data
Firm recognized as Best ESG Research and Data Provider by Environmental Finance and Investment Week.
End-to-End ESG Solutions
ESG products and services that serve the entire investment value chain.
30 Years of ESG Expertise
800+ ESG research analysts across our global offices.
A Leading SPO Provider
As recognized by Environmental Finance and the Climate Bonds Initiative.
Related Insights and Resources
Controversies Over ‘Forever Chemicals’: Navigating the US Landscape of PFAS Regulations
The new US EPA drinking water standards and the CERCLA designation of PFOA and PFOS as hazardous substances show increased regulatory oversight and the expanding scope of potential liabilities across the supply chain. This report explores the latest regulatory developments concerning PFAS in the United States.
Voice of the Asset Owner Survey 2024: Quantitative Analysis
This 3rd annual survey highlights the motivations, attitudes and challenges of institutional asset owners in the current environment. It features qualitative insights based on a survey of asset owners from a diverse range of institution types and sizes across North America, Europe and Asia-Pacific.
ESG Shareholder Resolutions: The Big Three Still Hold the Key
This 2024 report sheds light on the voting trends observed among asset managers and showcases the voting records of the Big Three index firms. It also highlights how shareholders are responding to the growing volume of resolutions addressing ESG themes.
Related Solutions
Country Screening
Screen countries for compliance to international treaties and agreements as well as UN, US and EU sanctions.
Learn MoreESG Risk Ratings
Take a coherent and consistent approach to assessing financially material ESG risks.
Learn MoreCountry Research & Ratings
Understand the ESG risks that affect countries’ long-term prosperity to support your sovereign bond and ESG country analyses.
Learn MoreCopyright ©2023 Sustainalytics. All rights reserved.
The information, methodologies, data and opinions contained or reflected herein are proprietary of Sustainalytics and/or content providers, intended for internal, non-commercial use and may not be copied, distributed or used in any other way, including via citation, unless otherwise explicitly agreed in writing.
They are provided for informational purposes only and (1) do not constitute an endorsement of any product or project; (2) do not constitute investment advice, nor represent an expert opinion or negative assurance letter; (3) are not part of any offering and do not constitute an offer or indication to buy or sell securities, to select a project or make any kind of business transactions; (4) are not an assessment of the issuer’s economic performance, financial obligations nor of its creditworthiness; (5) are not a substitute for a professional advise; (6) past performance is no guarantee of future results; (7) have not been submitted to, nor received approval from, any relevant regulatory bodies.
These are based on information made available by third parties, subject to continuous change and therefore are not warranted as to their merchantability, completeness, accuracy, up-to-dateness or fitness for a particular purpose. The information and data are provided “as is” and reflects Sustainalytics’ opinion at the date of its elaboration and publication.
Sustainalytics nor any of its content providers accept any liability for damage arising from the use of the information, data or opinions contained herein, or from the use of information resulting from the application of the methodology, in any manner whatsoever, except where explicitly required by law.
Any reference to content providers names is for appropriate acknowledgement of their ownership and does not constitute a sponsorship or endorsement by such owner. A list of our content providers and their respective terms of use is available on our website. For more information visit http://www.sustainalytics.com/legal-disclaimers
Sustainalytics may receive compensation for its ratings, opinions and other deliverables, from, among others, issuers, insurers, guarantors and/or underwriters of debt securities, or investors, via different business units. Sustainalytics has put in place adequate measure to safeguard the objectivity and independence of its opinions. For more information visit Governance Documents or contact [email protected].