S&P Global Ratings

Overview
Why get one?
How is it done?

S&P Global Shades of Green’s Company Assessments are built on climate science. Launched in 2020, and using the renowned Shades of Green methodology, the Company Assessment provides an in-depth look into the environmental impact of companies, evaluating the greenness of corporate activities and their transition efforts. The Shades of Green methodology was originally developed through the CICERO Center for International Climate Research-led research project, Sustainable Edge, in iterative collaboration with financial sector partners and companies.

Our Company Assessments are a practical tool for investors, lenders, and public authorities for understanding climate risk, including in preparation for green equity listings, green initial public offerings (IPOs), EU Taxonomy reporting, and providing transparency to inform their assessment of corporate sustainability.

The Shades of Green approach explicitly links the environmental and financial aspects by assigning a Shade of Green to a company’s revenues, operating costs, and capital expenditures. The assessment reflects our view of how green a company’s activities are and may help investors to track companies’ transition efforts.

Shades of Green includes a governance score that reflects our view of the robustness of the environmental governance structure, graded as either Excellent, Good or Fair. The assessment report includes key environmental performance indicators to make it easier for investors to compare progress.

The assessment also provides investors and lenders with analysis on the likely alignment to the EU Taxonomy, including a review of the do no significant harm (DNSH) criteria and a high-level review of minimum safeguards.

Our company assessments are desk reviews, based on documentation provided by the company and information gathered during meetings, teleconferences and e-mail correspondence with the issuer.

The Assessment Process

Overview
- Overview
  
  S&P Global Shades of Green’s Company Assessments are built on climate science. Launched in 2020, and using the renowned Shades of Green methodology, the Company Assessment provides an in-depth look into the environmental impact of companies, evaluating the greenness of corporate activities and their transition efforts. The Shades of Green methodology was originally developed through the CICERO Center for International Climate Research-led research project, Sustainable Edge, in iterative collaboration with financial sector partners and companies.
Why get one?
- Why get one?
  
  Our Company Assessments are a practical tool for investors, lenders, and public authorities for understanding climate risk, including in preparation for green equity listings, green initial public offerings (IPOs), EU Taxonomy reporting, and providing transparency to inform their assessment of corporate sustainability.
How is it done?
- How is it done?
  
  The Shades of Green approach explicitly links the environmental and financial aspects by assigning a Shade of Green to a company’s revenues, operating costs, and capital expenditures. The assessment reflects our view of how green a company’s activities are and may help investors to track companies’ transition efforts.
  
  Shades of Green includes a governance score that reflects our view of the robustness of the environmental governance structure, graded as either Excellent, Good or Fair. The assessment report includes key environmental performance indicators to make it easier for investors to compare progress.
  
  The assessment also provides investors and lenders with analysis on the likely alignment to the EU Taxonomy, including a review of the do no significant harm (DNSH) criteria and a high-level review of minimum safeguards.
  
  Our company assessments are desk reviews, based on documentation provided by the company and information gathered during meetings, teleconferences and e-mail correspondence with the issuer.
  
  The Assessment Process

The Shades of Green Methodology for Company Assessments

At the heart of the Company Assessment methodology are the Shades of Green, which reflect our opinion of the extent to which revenue streams, operational expenditures, and investments contribute to the transition to a low carbon and climate resilient future and their exposure to climate risks.

Our methodology provides a nuanced yet digestible assessment for investors by acknowledging that ‘greenness’ is not binary - investments in all Shades of Green projects are necessary to successfully achieve the Paris Agreement target of keeping global warming well below 2°C. In some cases, activities or technologies that reduce emissions in the near-term result in prolonged use of high-emitting infrastructure and an increase in net emissions in the long term. The Shades of Green methodology evaluates how well investments are aligned with a low carbon climate resilient future through a range of shading from Dark Green to Red.

Learn more about how we apply the Shades of Green.

Overview
Nasdaq Green Designations
B3 Ações Verdes (BAV)

Approved Reviewer for Green Equity Exchange Designations

S&P Global Shades of Green is currently an approved reviewer for two major stock exchanges’ green designations: the Nasdaq Green Equity and Nasdaq Green Equity Transition Designations, and the B3 The Brazilian Stock Exchange B3 Ações Verdes (BAV).

S&P Global Shades of Green has provided stakeholder input to the development of the Nasdaq principles, and later became the first approved reviewer for B3.

Nasdaq Green Equity Designations

S&P Global Shades of Green is currently an approved reviewer for the Nasdaq Green Equity and Green Equity Transition designations and has provided stakeholder input to the development of the designation principles. In June 2021 Nasdaq launched voluntary Green Equity Designations targeting green and transition companies on Nasdaq Nordic markets. The Nasdaq Green Designations provide transparency on green credentials of a company and offer a way to follow a company’s progress over time.

Our Company Assessments evaluate alignment with the Nasdaq Green Equity and Transition Designations principles. To meet the Green Equity Designation principles, companies must have more than 50 percent of turnover from green activities and continue to invest in a majority share of green activities, in addition to providing transparency on EU Taxonomy alignment and company-level sustainability targets.

Access the Shades of Green methodology for Nasdaq Green Designations here.

B3 Ações Verdes (BAV) Green Equity Designation

S&P Global Shades of Green is the first approved reviewer for the B3 Ações Verdes (BAV), as of June 2024. In May 2024, B3 The Brazilian Stock Exchange launched a voluntary B3 Green Equities (BAV) designation targeting green companies in Brazilian markets, based on the World Federation of Exchanges Green Equity Principles. The B3 Ações Verdes (BAV) Designations provide transparency to investors on green credentials of a company and offer a way to follow a company’s progress over time.

Our Company Assessments evaluate alignment with the B3 Ações Verdes BAV) principles. To meet the Green Equity Designation principles, companies must have more than 50 percent of annual gross revenue from activities that contribute to the green economy and continue to invest in a majority share of green activities.

Access the Shades of Green methodology for B3 Ações Verdes (BAV) Designations here.

Overview
- Overview
  
  Approved Reviewer for Green Equity Exchange Designations
  
  S&P Global Shades of Green is currently an approved reviewer for two major stock exchanges’ green designations: the Nasdaq Green Equity and Nasdaq Green Equity Transition Designations, and the B3 The Brazilian Stock Exchange B3 Ações Verdes (BAV).
  
  S&P Global Shades of Green has provided stakeholder input to the development of the Nasdaq principles, and later became the first approved reviewer for B3.
Nasdaq Green Designations
- Nasdaq Green Designations
  
  Nasdaq Green Equity Designations
  
  S&P Global Shades of Green is currently an approved reviewer for the Nasdaq Green Equity and Green Equity Transition designations and has provided stakeholder input to the development of the designation principles. In June 2021 Nasdaq launched voluntary Green Equity Designations targeting green and transition companies on Nasdaq Nordic markets. The Nasdaq Green Designations provide transparency on green credentials of a company and offer a way to follow a company’s progress over time.
  
  Our Company Assessments evaluate alignment with the Nasdaq Green Equity and Transition Designations principles. To meet the Green Equity Designation principles, companies must have more than 50 percent of turnover from green activities and continue to invest in a majority share of green activities, in addition to providing transparency on EU Taxonomy alignment and company-level sustainability targets.
  
  Access the Shades of Green methodology for Nasdaq Green Designations here.
B3 Ações Verdes (BAV)
- B3 Ações Verdes (BAV)
  
  B3 Ações Verdes (BAV) Green Equity Designation
  
  S&P Global Shades of Green is the first approved reviewer for the B3 Ações Verdes (BAV), as of June 2024. In May 2024, B3 The Brazilian Stock Exchange launched a voluntary B3 Green Equities (BAV) designation targeting green companies in Brazilian markets, based on the World Federation of Exchanges Green Equity Principles. The B3 Ações Verdes (BAV) Designations provide transparency to investors on green credentials of a company and offer a way to follow a company’s progress over time.
  
  Our Company Assessments evaluate alignment with the B3 Ações Verdes BAV) principles. To meet the Green Equity Designation principles, companies must have more than 50 percent of annual gross revenue from activities that contribute to the green economy and continue to invest in a majority share of green activities.
  
  Access the Shades of Green methodology for B3 Ações Verdes (BAV) Designations here.

Use Cases

Before an IPO Announcement

Companies seeking an external opinion on their activities for listing on stock exchanges or a green equity or Initial Public Offering (IPO) announcement.
Obtaining a Green Designation on Stock Exchanges

Companies seeking to obtain a green designation on certain stock exchanges (e.g.: the Nasdaq Green Equity Designation or Green Equity Transition Designation on Nasdaq European markets, or the B3 Ações Verdes (BAV) Designation on Brazilian markets), either when going public as a green equity offering or as a listed company to help provide transparency on their green business models, status and strategies to investors, business and other stakeholders.
Investor Communications

Investors seeking to understand the climate risk of their portfolio companies.
EU Taxonomy Reporting

Companies preparing to report in accordance with the EU Taxonomy.