Leading credit ratings, benchmarks and analytics provider S&P Global announced today the acquisition of the largest external reviewer of sustainable bond and green financing frameworks Shades of Green from Norway-based Center for International Climate Research (CICERO).

Shades of Green’s Second Party Opinions (SPOs) are independent, research-based assessments on companies’ and governments’ green, sustainability and sustainability-linked debt issuances and frameworks, evaluating alignment with market standards, typically provided before any borrowing is raised. The company also provides climate risk and impact reporting reviews of companies.

CICERO provided the SPO for the for the first green bond framework issued by the World Bank in 2008, and established Shades of Green as a subsidiary in 2018. The provider’s “Shades of Green” methodology assigns shadings to investments and activities to reflect the extent to which they contribute to the transition to a low carbon and climate resilient future. Recent reviews included an assignment of “Medium Green” to India’s Sovereign Green Bond Framework, and “Dark Green” to Vovlo Group’s Green Finance Framework.

Christa Clapp, Co-founder, CICERO Shades of Green, said:

“The Shades of Green methodology provides transparency on climate risk while motivating early-movers in the market and rewarding advanced actors.”

S&P stated that the acquisition will be integrated into S&P Global Ratings, expanding the breadth and depth of its SPO offering. With the acquisition, Shades of Green will have over 70 dedicated sustainable finance analysts globally.

Kristin Halvorsen, Director, Center for International Climate Research (CICERO), said:

“With S&P Global Ratings, we have found a partner with the same commitment to transparency and the means to support a more sustainable financial system.”

The acquisition follows several years of rapid growth in the sustainable finance market, with the ESG debt universe reaching $4.5 trillion now compared to $1.5 trillion 2 years ago. While sustainable debt issuances slowed this year alongside the broader market, green, social, sustainability and sustainability-linked bond volumes hit a record share of bond issuances in Q3 2022, and a recent report from S&P Global Ratings forecasts continued long-term growth in the market based on trends including investor demand, changing regulation and the alignment of financing needs with sustainability objectives.

Martina Cheung, President of S&P Global Ratings, said:

“In the same way we strive to provide transparency on credit quality with our credit ratings, we’ve been building the capabilities and expertise to support the development of the sustainable debt market. Shades of Green’s unrivalled climate expertise and track record will help us further expand and strengthen our ability to help our customers seeking access to the sustainable debt markets.”