2021 Stakeholder Sustainability Report

A MESSAGE FROM OUR PRESIDENT & CEO 2021 SUSTAINABILITY HIGHLIGHTS ABOUT MOODY'S BETTER BUSINESS BETTER LIVES BETTER SOLUTIONS APPENDIX Moody's 2021 Stakeholder Sustainability Report 80 ESG Integration Beyond our comprehensive suite of ESG solutions, we continue to integrate ESG considerations across our portfolio — from credit ratings to risk management insights and analytics. We aim to provide easily accessible, high-quality ESG data to our analysts and customers. To achieve this, we are expanding our ESG capabilities through targeted investments and acquisitions and developing a robust data infrastructure that streamlines access to ESG, climate risk and sustainable finance data. ESG INTEGRATION INTO CREDIT RATINGS Moody's Investors Service (MIS) systematically incorporates material ESG and climate considerations into its credit analysis and credit ratings to help market participants understand how ESG issues affect their fixed income decisions. In January 2021, MIS launched ESG Issuer Profile and Credit Impact Scores to provide greater transparency into how ESG considerations are incorporated into credit ratings. While initially focused on sovereign issuers, MIS expanded its coverage in 2021 to include more than 1,700 governments, financial institutions and corporations across a wide range of sectors. By the end of 2022, MIS intends to publish ESG scores for thousands of additional rated issuers. Assessing exposure with Issuer Profile Scores Issuer Profile Scores (IPSS) are assessments of the exposure to environmental, social and governance risks or benefits, based on the general ESG principles that have a material impact on credit quality. Based on a five-point scale ranging from positive (E-1, S-1 or G-1) to very highly negative (E-5, S-5 or G-5), these scores provide a consistent way to express this assessment. IPS Scoring Scale E-1 S-1 G-1 Positive E-2 S-2 G-2 Neutral-to-low E-3 S-3 G-3 Moderately negative E-4 S-4 G-4 Highly negative E-5 S-5 G-5 Very highly negative

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