S&P Global, a leading provider of credit ratings, benchmarks, and analytics, has announced the acquisition of Shades of Green, the largest external evaluator of sustainable bond and green finance frameworks, from the Center for International Climate Research in Norway (CICERO).
Shades of Green's Second Party Opinions (SPOs) are independent, research-based evaluations of companies' and governments' green, sustainability, and sustainability-linked debt issuances and frameworks, evaluating their alignment with market standards, typically provided prior to the raising of new debt. The company also provides analyses of corporations' climate risk and impact reporting.
CICERO provided the SPO for the World Bank's first green bond framework in 2008 and developed Shades of Green in 2018. The provider's "Shades of Green" methodology gives hues to investments and activities based on their contribution to a low-carbon and climate-resilient future. Recent reviews included the assignment of "Medium Green" to India's Sovereign Green Bond Framework and "Dark Green" to the Green Finance Framework of Volvo Group.
Co-founder of CICERO Shades of Green, Christa Clapp, stated:
"The Shades of Green methodology gives openness on climate risk while simultaneously incentivizing early market entrants and rewarding advanced operators."
According to S&P, the transaction will be integrated into S&P Global Ratings, broadening and deepening its SPO offering. With the purchase, Shades of Green will have more than 70 analysts committed to sustainable finance worldwide.
Director of the Center for International Climate Research (CICERO) Kristin Halvorsen stated:
"We have discovered in S&P Global Ratings a partner with the same commitment to transparency and the means to create a more sustainable financial system."
The acquisition follows several years of significant growth in the sustainable finance business, during which the ESG debt universe increased from $1.5 trillion to $4.5 trillion. While sustainable debt issuances slowed this year alongside the broader market, green, social, sustainability, and sustainability-linked bond volumes reached a record share of bond issuances in the third quarter of 2022, and a recent report from S&P Global Ratings forecasts continued long-term growth in the market due to trends such as investor demand, changing regulation, and the alignment of financing needs with sustainability objectives.
President of S&P Global Ratings Martina Cheung said:
"In the same manner that we try to give credit quality transparency through our credit ratings, we've been developing the resources and experience to support the growth of the sustainable debt market. The unparalleled climatic expertise and track record of Shades of Green will assist us in expanding and enhancing our capacity to assist clients seeking access to sustainable finance markets."