Moody’s headquarters in the United States. Central photo
Korea received 1st grade, the highest among all 5 grades, in the environmental, social, and governance (ESG) evaluation of international credit rating agency Moody’s. The U.S. ranks 2, while China and Japan rank 3 behind Korea.
Moody’s released an ESG evaluation report for 144 countries around the world on the 18th (local time). ESG refers to non-financial factors in national or corporate management, such as eco-friendly, social responsibility, and improved governance. This is the first time Moody’s has released an ESG rating on a national level. How each country’s ESG level affects the national credit rating was evaluated in five stages, from’positive’ (grade 1) to’very negative’ (grade 5).
In the Moody’s ESG evaluation, 11 countries, including Korea, Germany and Switzerland, received the 1st grade, the highest grade. Grade 1 means that the ESG level is high enough to have a positive effect on the evaluation of the national credit rating. The Ministry of Strategy and Finance expects that Korea’s high ESG evaluation score will be beneficial in evaluating the national credit rating in the future.
The second-grade’neutral’ evaluation was received by 30 countries including the US, UK, Australia and France. Grade 3 means’somewhat negative’, and was given to 38 countries including China, Japan, and Russia. The 4th grade was evaluated as’negative’ and the 5th grade was’very negative’, and was assigned to 45 and 20 countries, respectively.
By detailed category, Korea received 1st grade in all four categories: system, transparency, and information disclosure within the governance sector. In the social sector as a whole, the second grade was given, and education, health and safety, and access to basic services were grade one, but the population category received low evaluation due to rapid aging. In the environmental sector, all five subcategories were rated 2, including carbon conversion, climate change, water resource management, waste and pollution, and natural capital.
Deputy Prime Minister Hong Nam-ki and Minister of Equipment, said, “It is highly likely that ESG will emerge as a major factor when evaluating the national credit rating in the future.” I will continue.”
Sejong = Reporter Seongbin Lim [email protected]