September 20, 2017

JCR Signed a Statement on ESG in Credit Ratings
By United Nations Principles for Responsible Investment (UNPRI)On September 15, 2017, Japan Credit Rating Agency, Ltd. (JCR) signed an “Initiative on ESG in Credit
Ratings Statement”, initiated by United Nations Principles for Responsible Investment (UNPRI).
The purpose of this initiative is to enhance credit rating agencies to incorporate ESG factors into its
credit rating analysis systematically and transparently in order to respond to certain risks in debt markets. A
credit rating agency, which signed this statement are enhanced to commit the global activities under thisinitiative, and affirmed its commitment to :evaluate the extent to which ESG factors are credit relevant for different issuers;publish their views transparently on the ways in which ESG factors are considered in credit ratings;

review the ways ESG factors are integrated into credit analysis as our understanding of thesefactors evolves;maintain organizational governance and resourcing to deliver quality ratings, including ESG
analysis where relevant;

participate in industry-wide efforts to develop consistent public disclosure by issuers on ESG
factors that could impact their creditworthiness.

participate in dialogue with investors to identify and understand ESG risks to creditworthiness.

JCR, as the undersigned, will involve positively in global forum concerning ESG factors in credit
ratings. It also plans to publish its effort to clarify how it considers ESG factors into credit rating analysis
systematically.
For more details, please see the UNPRI’s “Statement on ESG in Credit Ratings” on its website.
ESG in Credit Ratings Statement

Japan Credit Rating Agency, Ltd.
Jiji Press Building, 5-15-8 Ginza,
Chuo-ku, Tokyo 104-0061, Japan
Tel. +81 3 3544 7013, Fax. +81 3 3544 7026

1/1
http://www.jcr.co.jp

STATEMENT ON ESG IN CREDIT RATINGS
We, the undersigned, recognise that environmental, socialand governance (ESG) factors can affect borrowers’ cash
flows and the likelihood that they will default on their debt
obligations. ESG factors are therefore important elements inassessing the creditworthiness of borrowers. For corporates,concerns such as stranded assets linked to climate change,
labour relations challenges or lack of transparency aroundaccounting practices can cause unexpected losses,expenditure, inefficiencies, litigation, regulatory pressure andreputational impacts.

the two assessments should not be confused or seen asinterchangeable.

At a sovereign level, risks related to, inter alia, naturalresource management, public health standards andcorruption can all affect tax revenues, trade balance andforeign investment. The same is true for local governments
and special purpose vehicles issuing project bonds. Such
events can result in bond price volatility, and increase the riskof defaults.

The credit rating agencies listed below recognise the needsof investors for greater clarity on how ESG factors are
considered in credit analysis. In order to achieve this sharedgoal to enhance systematic and transparent consideration of
ESG factors in the assessment of creditworthiness, the credit
rating agencies listed below affirm their commitment to:

In order to more fully address major market and idiosyncraticrisk in debt capital markets, underwriters, credit rating
agencies and investors should consider the potential financial
materiality of ESG factors in a strategic and systematicway. Transparency on which ESG factors are considered,
how these are integrated, and the extent to which they are
deemed material in credit assessments will enable betteralignment of key stakeholders.
In doing this the stakeholders should recognise that credit
ratings reflect exclusively an assessment of an issuer’screditworthiness. Credit rating agencies must be allowed
to maintain full independence in determining which criteria
may be material to their ratings. While issuer ESG analysis
may be considered an important part of a credit rating,With this in mind, we share a common vision to enhancesystematic and transparent consideration of ESG factors
in the assessment of creditworthiness.

HOW CREDIT RATING AGENCIESSUPPORT THIS VISION

■■

■■

■■

■■

■■

■■

evaluate the extent to which ESG factors are creditrelevant for different issuers;
publish their views transparently on the ways in which
ESG factors are considered in credit ratings;
review the ways ESG factors are integrated into credit
analysis as our understanding of these factors evolves;maintain organisational governance and resourcing todeliver quality ratings, including ESG analysis whererelevant;participate in industry-wide efforts to develop consistentpublic disclosure by issuers on ESG factors that could
impact their creditworthiness;participate in dialogue with investors to identify andunderstand ESG risks to creditworthiness.

CREDIT RATING AGENCY SIGNATORIES
Axesor Rating

Liberum Ratings

Beyond Ratings

Moody’s Corporation

China Chengxin International Credit Rating Co., Ltd.

RAM Ratings

Dagong Global Credit Ratings GroupRating-Agentur Expert RA GmbH

Golden Credit Rating International Co., Ltd.

Scope Ratings

Japan Credit Rating Agency

S&P Global Ratings

HOW INVESTORS SUPPORT THISVISIONThe investors listed overleaf are all signatories to the six
UN-supported Principles for Responsible Investment. In
signing the Principles, the investors listed below affirm theircommitment to:
■■

■■

■■

incorporate ESG factors into investment analysis anddecision-making processes;
seek appropriate disclosure on ESG issues by investee
entities;
report on activities and progress towards implementing
responsible investment.

Specifically, as fixed income investors, and as the primaryusers of credit ratings, the signatories of this statement
will support formal integration of ESG factors into ratings.
This helps ensure ESG risks are appropriately addressed ininvestment decision making, which will increase investor
confidence in the quality and utility of those ratings. To
support these efforts, these investors seek to participate indialogue and engage in collaborative initiatives with otherinvestors and credit rating agencies to further efforts tointegrate ESG.

INVESTOR SIGNATORIES
Aberdeen Asset Management

Insight Investment

ACTIAMInvestec Asset Management

Addenda Capital

IVM Caring Capital

AEGON Asset Management

Jarislowsky Fraser Global Investment Management

Alberta Investment Management Corporation

Kempen Capital Management

AllianceBernstein (AB)

KfW

Allianz Global Investors

Kommunal Landspensjonskasse

Allianz SE

La Française AM’AlphaFixe Capital

Länsförsäkringar

AMF

Legal & General Investment Management

AMP Capital

Leith Wheeler Investment Counsel Ltd.

Ardea Investment Management

Local Government SuperASR Nederland NV

LocalTapiola Asset Management

Australian Ethical Investment Ltd.

Lombard Odier Asset Management

AustralianSuper

M&G Investments

Aviva InvestorsMaple-Brown Abbott

Bank J Safra Sarasin

Mariner Investment GroupBarings LLC

MFS Investment Services

Bâtirente

MirovaBlueBay Asset ManagementMN

BMO Global Asset Management

Montrusco Bolton Investments Inc.

BNP Paribas Investment Partners

Natixis Asset Management

Brandywine Global Investment Management

Neuberger Berman

Breckinridge Capital Advisors

Nikko Asset Management Co. Ltd.

British Columbia Investment Management Corporation

NN Investment Partners

British Columbia Municipal Pension- Board of Trustees

OFI Asset Management

BT Pension Scheme ManagementÖhmanCaisse de dépôt et placement du Québec

Ontario Teachers’ Pension Plan

Caisse des dépôts et consignations

OP Wealth Management

Caja Ingenieros GestiónPartners Group

California Public Employees’ Retirement System CalPERS

Pax World Management

Calvert Investments

PGGM Investments

Candriam Investors Group

Principal Global Investors

CCOO, FP

Prudential Portfolio Managers (South Africa)

Challenger Ltd

Public Investment Corporation

Church of Sweden

Public Sector Pension Investment Board

Christian Brothers Investment Services

QBE Insurance Group

Colonial First State Global Asset Management

QIC

Commonfund

RBC Global Asset Management

Connor, Clark & Lunn Investment Management

Régime de Retraite de l’Université de Montréal

Delta Alternative Management

Royal London Asset Management

Domini Social Investments

Sanlam Investment Management

EGAMO

Sarasin & Partners

ERAFP

Saturna Capital

Erste Asset Management GmbHSchroders

Federal Finance Gestion

Skandinaviska Enskilda Banken (SEB) AB

First State Super

SKY Harbor Capital Management

Folketrygdfondet

Sparinvest

Fondo Pegaso

Standish Mellon Asset Management

Fonds 1818

Stone Harbor Investment Partners

Fonds de Réserve pour les Retraites

T&D Asset Management

Generation Investment Management

TD Asset Management

Geroa Pentsioak EPSVThe Pensions Trust

Global Evolution

Treehouse Investments

Goldman Sachs Asset Management

Union Bancaire PrivéeHandelsbanken Asset Management

Union Investment

Henderson Global Investors

University of Toronto Asset Management Corporation

Hermes Investment Management

Vancity Investment Management

HESTA Super Fund

Victorian Funds Management Corporation

HSBC Global Asset Management

Wellington Management

IFM Investors

Wespath Investment Management

Income Research & Management

Zurich Insurance Group

This statement remains open to new credit rating agency and investor signatories.
Contact FI@unpri.org for information on how to sign up.