Expanded ESG Data Identifiers Support Rapid Growth of ESG Bond Issuance
NEW YORK, Oct. 28, 2021 /PRNewswire/ -- CUSIP Global Services (CGS) today announced the addition of Environmental, Social and Governance (ESG) data attributes for corporate and municipal bonds in its data feed and desktop products. The new ESG tags will enable bond issuers and investors to instantly identify and categorize securities that contain ESG attributes, distinguishing them as green, social, or sustainability bonds. ESG categorization is determined by CGS upon review of primary offering documents as part of the CUSIP issuance process.
The CUSIP is a nine-character alphanumeric security identifier that captures the unique attributes of issuers and their financial instruments throughout the U.S. and Canada. In the U.S. bond market, the CUSIP is used by investors to uniquely identify and track securities and link them with the underlying issuing entity. With this enhancement of its data feed and desktop products, CGS will append a text-based descriptor to the standard CUSIP ID for ESG bonds designating them either a green, social or sustainability-oriented bond. The new attributes, which cover municipal and corporate debt, are provided at no additional cost and will include the verifying third party when available.
"With total new issuance volume for green, social and sustainability bonds reaching nearly $500 billion in the first half of 2021 alone, it is clear that ESG principles have become a major priority for issuers and investors alike," said Scott Preiss, Managing Director and Global Head of CUSIP Global Services. "By clearly tagging ESG bonds in the pre-market environment – and providing granularity on the specific type of ESG bond being issued – we are making it possible to seamlessly track these securities throughout the financial system using our universally recognized, industry standard taxonomy."
The ESG segment of the bond market has experienced an average annual growth rate of 49% since 2016, with the largest share of volume and deals coming out of the U.S. market. Attractive both for their social benefits and the cost-advantages afforded to issuers, ESG bonds have become a cornerstone of many investor portfolios. As the segment continues to grow, this new enhancement to CGS's data feed and desktop products will deliver the critical reference data necessary to track ESG bonds throughout security master files, risk systems and trading platforms worldwide.
For municipal bonds, the new ESG attributes can be further supplemented by CGS' collaboration with ISS ESG (formerly ACRe Data), which links proprietary ESG scores for US municipalities to CUSIP municipal issuer codes. The ISS ESG scores, updated quarterly, offer additional ESG insights into US municipalities using a number of criteria, including socioeconomic, infrastructure, and climate-based factors.
Note to the editor: In response to concerns recently raised by the European Commission regarding the pending merger between S&P Global and IHS Markit, S&P Global has committed to divest CUSIP Global Services. Please see the press release for more information.
About CUSIP Global Services
The financial services industry relies on CGS' unrivaled experience in uniquely identifying instruments and entities to support efficient global capital markets. Its extensive focus on standardization over the past 50 years has helped CGS earn its reputation as a trusted originator of quality identifiers and descriptive data, ensuring that essential front- and back-office functions run smoothly. Relied upon worldwide as the industry standard provider of reliable, timely reference data, CGS is also a founding member and co-operates the Association of National Numbering Agencies (ANNA) Service Bureau, a global security and entity identifier database for over 34 million public and privately traded instruments, contributed by 116 national numbering agencies providing ISIN coverage across more than 200 jurisdictions. CGS is managed on behalf of the American Bankers Association (ABA) by S&P Global Market Intelligence, with a Board of Trustees that represents the voices of leading financial institutions. For more information, visit www.cusip.com.
About The American Bankers Association
The American Bankers Association is the voice of the nation's $21.2 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $17 trillion in deposits and extend nearly $11 trillion in loans.
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SOURCE CUSIP Global Services