Fitch: "Climate Regulations Have Neutral Impact on Corporate Credit Ratings"

[Asia Economy Reporter Yujin Cho] The credit rating agency Fitch has judged that the impact of climate change-related regulatory initiatives on corporate credit ratings is 'neutral.'

David McNeil, a Fitch analyst, stated on the 14th (local time), "The climate change executive order signed by U.S. President Joe Biden currently has a neutral impact on the credit ratings of companies in sectors such as automotive, energy, and utilities."

He added, "The push for 'carbon neutrality,' aiming to reduce carbon emissions to zero by 2050, could have a long-term impact on corporate business models," suggesting that this assessment could change.

He further noted, "President Joe Biden's climate change executive order can act as a 'catalyst' that induces companies to change their business models in response to increasing social and political concerns about environmental issues."

While projecting that it will be difficult to achieve the goal of complete decarbonization of the energy sector by 2035, which Biden proposed as a major campaign pledge during his candidacy, he expected that movements toward this goal will continue through additional executive orders and private sector initiatives.

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