No Rating Changes Expected: The updated ESG criteria are not deemed material and will not affect existing credit ratings.
More Clarity on ESG Evaluation: Revisions aim to enhance transparency and address varying global ESG policy approaches.
Effective May 16, 2025: The new criteria replace the August 2024 version and apply across all rated sectors.
Morningstar DBRS has released updated criteria on how it incorporates Environmental, Social, and Governance (ESG) factors into credit ratings—affirming that while refinements were made, no rating changes are anticipated.
The revised document, Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings, outlines how 17 ESG factors are evaluated across sectors including Governments, Financial Institutions, Corporate Finance, and Structured Finance.
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“Changes to the Criteria either add clarifications or reflect the diverging paths certain countries are taking in their approaches to ESG,” said Morningstar DBRS.
The update follows a routine internal review and replaces the previous criteria published on August 13, 2024. Morningstar DBRS emphasized that the update is not material:
“Morningstar DBRS deems the update not to be material and determined that no credit ratings are expected to change as a result of this update.”
The new criteria take effect on May 16, 2025, reinforcing the agency’s commitment to transparent and adaptable ESG integration while recognizing geopolitical differences in ESG policy frameworks.
This update applies broadly across a wide range of sectors—from banking and insurance to real estate, energy, and sovereign entities—signaling to executives and investors that ESG remains central to credit risk assessment, though with stable implications for rated entities.
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