Moody's acquires Four Twenty Seven

This move follows Moody’s previous acquisition of Vigeo Eiris, an environmental, social and governance research and assessment firm in April. The incorporation of both Vigeo Eiris and Four Twenty Seven into Moody’s credit rating service signals changing investor attitudes toward climate considerations. The credit ratings of business and governments conducted by Moody’s are likely to be subject to re-evaluation in the coming months, taking into account new climate statistics and risk assessments provided by Four Twenty Seven and Vigeo Eiris. Investors may need to reconsider their investments in cases in which a borrower’s credit rating is decreased to factor in potential environmental risks resulting from climate change.

A study from the Swiss Finance Institute released in June claims that many investors believe that climate risks have financial implications for their investment portfolios. Their reasoning however does not tend to be concerned with physical risks of climate change like extreme weather or natural disasters, but is more often concerned with public brand image and the consequences of government intervention. New credit ratings with wider analysis and considerations for climate risks will likely be useful for investors who want to put their money into projects and businesses that adhere to Moody’s new climate considerations and therefore are likely to be viewed positively by a climate-concerned public and are unlikely to be hindered by government intervention.

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