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Moody's developing new system to score companies on carbon transition risk

May 09, 2019 / Robert Walton

Moody's Investor Service is developing a carbon transition assessment (CTA) for public, non-financial companies, a recognition of the "risks and opportunities" businesses may face as they look to access capital. Moody's has requested feedback on the idea and opened a 60-day comment period on a proposed scoring framework of a company's carbon transition risk, which includes the need to comply with regulations aimed at greenhouse gas reductions and the cost required to decarbonize energy sources. There is a growing acknowledgement of the risks corporations with carbon and climate exposure may face, which has spurred increasing clean energy purchases. Last year, corporations around the world signed deals for 13.4 GW of clean energy — more than doubling 2017's record amount of 6.1 GW.