S&P Global Inc. (SPGI) Earnings Call Transcript & Summary

Hi, everyone, and welcome to today's webinar. My name is Lindsey Hall, and I'm Head of Thought Leadership at S&P Global Sustainable1. It's my pleasure to moderate today's webinar titled Climate as a Material Risk. Before I introduce our guests, just a few housekeeping items. We recognize that the topic of today's webinar is of great interest to you all, and we want this to be an interactive session. And so we encourage you to submit questions for discussion in our Q&A widget. You'll see that at the bottom of your screen. These icons, these widgets will allow you to interact with us throughout the session. I'd also like to point out the survey widget. Please do take your time to fill out our short survey after the webinar. We really value your insight. In addition, you can find any of the reports that we talk about today in the resource widget. Now this webinar is being recorded, and an on-demand version will be available shortly after we finish. If you run into any technical issues during the program, please try refreshing your browser. And if those issues persist, please use the Q&A widget to contact us, and a member from our technical team will assist you. So with those issues out of the way, it's my pleasure to introduce today's panelists. Today, we're joined by Jennifer Laidlaw, who's a senior writer on the ESG thought leadership team at S&P Global Sustainable1, and we are also joined by Isabelle Stauffer, the Senior Manager of ESG Research at S&P Global Sustainable1. So I think with that, we're going to start with you, Jennifer, to kind of give us a lay of the land when it comes to climate risk in the way that companies and regulators and policymakers are approaching these questions.

Okay. Thanks, Lindsey. Well, thanks very much for inviting me to take part in the webinar. So to begin with, let's just take a deep dive into the reason why climate change is really a material risk and what companies, regulators, governments are doing to address this risk. Now many of us will have seen the latest IPCC report, which really underscores why corporations, governments and civil society really needs to think of climate in terms of a material risk. According to the IPCC, the world needs to reach peak emissions before 2025, and that's like under both a 1.5-degree scenario and a 2-degree scenario. So that means really emissions will have to decline after 2025, so there's really a lot of work to be done. And the world is certainly suffering from a changing climate. I know from my own personal experience, I live in rural France. In the last weekend, we had a snowstorm after having more than 20 degrees Celsius the weekend before. And I think probably many of you that are listening today are seeing the same kind of things. And just to emphasize that point, in 2021, we saw a whole host of severe weather events and the severe flooding in Europe, in Canada. There's wildfires in the U.S. There's drought in many parts of the world. Harvests are being affected. The human and economic cost of this is very high, and it will really transform the way we live our lives. And really against this backdrop, companies are facing a lot of pressure to prepare for climate change as a risk that they've got to look at their own internal operations. They're also being under pressure from investors, from regulators. And S&P Global Sustainable1, we've actually done some research, just looking at how climate change exposure is affecting companies. And almost 60% of the companies in the S&P 500 have at least one asset at high risk of physical impact from climate change. And these kind of things is really making shareholders and portfolio managers take a long, hard look at their investments for exposure to climate change and adapting them accordingly. And a growing number of regulators across the world are really requiring climate risk disclosure at financial institutions, just to see how they are being affected by climate change. And they're also looking at things such as stress testing their economies or stress testing their banks to see how they're exposed to climate change and what kind of risks an economy or a financial institution may be facing in the future. And over the last few years, we've seen an increasing number of central banks actually looking at climate change stress tests. Last year, the Bank of France published its climate change stress test, and the European Central Bank conducted an economy-wide stress test. And central banks are really looking at this in great detail. There's the Network for Greening the Financial System that was created in 2017, and that is basically a group of international central banks. And they have been looking at ways in how to help central banks put stress tests together with scenario analysis, and that has really helped put the spotlight on climate change as a material risk. So just as a way of background, really regulators have used stress tests in the past to assess how well banks can withstand adverse scenarios. For example, if there's a sharp economic downturn or there's an economic shock or there's a sudden change in market conditions, and they've been using them more and more since the financial crisis. And with the work of the NGFS and other central banks, they're really looking at whether climate change can be used through climate stress tests. So they're really tailoring these stress tests for climate change. And one of the things in the past that central banks have done is they've used these stress tests to basically increase capital charges for the banking sector, just to ensure that they've got enough money to account for any losses in the future. And that's something that potentially could come with climate change. At the moment, it's -- those are just exploratory exercises. And the idea is really to get a sense of like how much the economy or how much financial institutions are exposed to climate stress tests. And these, obviously, are very different because they're looking at climate. And what makes them different from the regular stress tests that we usually have is the banks and insurers has to look at a 30-year horizon, which is a huge amount of time because their business cycle is usually 3 to 5 years. And if you just look on the right side of the first slide, you can see the different NGF scenarios that have been put together. So they have different frame in their particular framework. They have a disorderly scenario. So that's a delayed or sudden implementation of transition policies, which are combined with very high costs. And then you have an orderly transition. So that means transition policies are enacted in a timely manner with limited cost. So that's the ideal scenario for everybody. And the worst-case scenario is basically the hot house world scenario, and that implies like no new climate policies are implemented. Everything stays the same as it is or was a couple of years ago. There's very limited cost to transition risks because no transition is taking place, but there is very high cost associated to damage from physical risks, so your wildfires, your floods which would cost an enormous amount of money. And if we can just move to the next slide, that would be great. So we did a climate stress test for our own, basically applying the NGF orderly and disorderly scenarios to see what the impact would be on carbon-intensive sectors, such as oil and gas. We also looked at the aviation sector, cars, metal mining, power generation. We looked at what would be the credit risk from transition risk on these sectors. Now what we found was that oil and gas really faced the highest credit impact from transition risk by 2050 under an NGFS disorderly scenario. Even under an orderly scenario, they're facing an almost 50% chance of credit impact. And airlines come second with a 62% chance of credit impact under a disorderly scenario. And the metals and mining actually come third. And even though that risk of credit impact is very high, it has the lowest percentage of companies using transition risk scenarios. So they're really not getting ready for any transition risk is what that means, and that could mean the financial risks are high and really show how much climate is a material risk for companies. And we're seeing reports coming out with huge cost of climate. It was one that was published last year that showed that the number of weather-related disasters has actually risen 5x from the 1970s to the 2010s. And the economic losses are total, like $1.38 trillion in the 2010 to 2019 decade. And as I said in the beginning, we've just seen the IPCC report, which really hits home why climate change should be a material issue for companies. So if we can just move to the next slide, that would be super. So how are companies adapting to this? Well, a lot that can be seen through standard setting and regulation, which has really been gathering steam over the last few years. In the EU, you've seen the green taxonomy kind of dictionary of sustainable activities, which is designed to steer companies as they adapt their business strategies to climate change. The EU has also come up with a Sustainable Finance Disclosure Regulation, which requires asset managers, pension funds to disclose how they consider ESG risks in their investment decisions. And we just saw recently the SEC in the U.S. has just proposed climate-risk disclosure regulations. So that's really another move forward in this push for more disclosure and more regulation. And we've seen taxonomy springing up all over the world. There are several underway in Asia. In other regions, South Africa just announced its own taxonomy last week, so there's really a lot of movement there. And there's also a growing momentum for making voluntary disclosure framework, such as the task force on climate-related financial disclosures or TSFD (sic) [ TCFD ] mandatory. There's also been calls for like global ESG disclosure frameworks, some kind of consistent disclosure that makes it easier to know exactly what companies should disclose. And that has really prompted the creation of an international sustainability standard board. And it last week just said what standards it's expecting to publish like later on this year, so there's going to be a lot of people looking at that and a lot of interest in that. So frameworks, such as the TCFD, are encouraging companies to report on how climate risk impact their businesses. It really uses guidelines for companies to show them how they can disclose material climate risk with governance, strategy, risk management, as well as metrics and targets. And it's voluntary. It's a voluntary framework but is definitely -- there's definitely a push to make it more mandatory. We've seen like different companies, for example, the U.K. is making some of the TCFD disclosures mandatory. New Zealand is also making -- has also been making moves in that direction. So that is going to have an enormous impact on companies because they will have to disclose like the different risks that they're facing because of climate change, and that should really be a game changer for everyone. So one of the really interesting aspects of our research is that we find like carbon-intensive sectors that I was talking about before are really reacting to the risks of climate change. They're ahead of -- they're actually ahead of other sectors in applying the TCFD recommendations. So they're obviously taking climate risk as material to their business. They're trying to manage that at the moment. And interestingly enough, the sector that has the highest credit risk has actually the highest TCFD integration among carbon-intensive sectors. Power generation comes next, metal and mining, then those airlines, then automotive. But even though they are applying TCFD, what we've seen is like less than half of these carbon-intensive industries are actually conducting transition risk scenario analysis, which means they're not seeing how resilient our strategies are to material risk from climate change. And that's something that's really a little bit worrying because they are taking it seriously, but they're not actually looking at the transition risks. And so that's something that they really need to start looking at. And that could be a huge risk to companies. And then you really need to jump on that bandwagon because, otherwise, late starters could face a massive disruption to businesses over longer term. So I'll just pause here so we can introduce our first polling question.

Thanks, Jen. That was great. Thank you for such a clear lay of the land. And so what we'd like to know from our audience in light of that landscape that Jen has just painted so nicely for us is to what extent are climate-related risks having an impact on your business strategy? The options here are that addressing climate risks is a central part of our strategy. It's sort of part and parcel of what we do; climate risk is important, but it's not our top priority; or finally, climate risk is not impacting our business strategy. So really curious to hear your perspective from our audience. [Voting]

I'll also just use this time to note that we encourage you to submit questions through the Q&A widget, and you can do that at any point during the webinar, and we'll have time to get to those towards the end of our 45 minutes today. So once everyone's had a chance to answer this, I think we can go ahead and take a look at our results. If we could pull those up. And so pretty striking there to see that nearly 63% of our respondents say that addressing climate risks is a central part of your strategy. Also interesting to see on the other end that more than 7% say that climate risk is not impacting your business strategy. So there's some interesting -- there's interesting distribution here. Jen, I don't know if you have any thoughts on this before we hand over to Isabelle.

Well, it's certainly like something that we have seen that a lot of companies, they are addressing climate risks, and it is a main part of their strategy. I think it's very interesting. 63%, that's huge, and I think it just shows how much companies are actually taking this seriously and really looking at climate change as a material risk now.

Great. Thank you. Well, I think that tees us up really nicely to hand over to you, Isabelle. So please go ahead and take the reins and talk us through what we need to know next.

Sure. Thank you very much, Jennifer, for the first part. And thank you, Lindsey, for inviting me to talk here about climate strategy and how companies and the CSA consider -- or see climate strategy. So if we look at the result of the Corporate Sustainability Assessment, or CSA, we can see that companies see climate change as a material issue. So maybe the CSA is S&P annual evaluation of company sustainability practices and was launched in 1999. It has been focusing on sustainability criteria that are both industry-specific and financially material. So as I mentioned before, one of the sustainability criteria covered in the CSA is materiality. So we look at where the company conducts a materiality analysis to identify the most material issue for the business in the long term, and we require a company to provide the 3 most material issues that will have a material impact on the business and the generation of long-term value creation. So if we look at the graph here, we can see that in 2021, nearly 1/4 of companies surveyed in the CSA consider climate change as 1 of the top 3 material issues that could have an impact on the business. It went from only 17% in 2020, so it confirms that companies are seeing a climate change as an increasingly material issue. Another key sustainability topic that we look at in the CSA is risk management, and more specifically here, emerging risks. So we look at where the companies are able to identify emerging risk, and we ask them to identify the 2 most important emerging risks that will have an impact on the long-term strategy. So what we can see here is that we have less and less companies that identify climate change as an emerging risk with only 2% in 2021. So this is an opposed trend as we've seen with material issue. What I want to add here is that the -- so many companies have not been able to identify emerging risk according to our expectation. So from all the companies that identified emerging risk, the one that identified climate change as an emerging risk represented 13% of all the provided emerging risks, but this is still a quite low number. And the reason for that is that climate change is indeed considered at risk but not an emerging one anymore, so it has moved from being an emerging risk to being a material issue. And the implication of that are the following: If you identified -- if you identify an emerging risk, you are only expected to kind of describe the impact, to report on the impact and to report on the potential mitigating measures, which companies have done. However, if you identify the topic as a material issue, we expect much more. We expect you to link climate change to your business strategy. We expect you to set up KPIs to set up a long-term target and to report on the progress towards this target. And eventually, we also want companies to link the KPI related to the material issue to the compensation of their executive management. And we've seen in the 2021 CSA that about 1/3 of the companies that had identified climate change as a material issue are also able to link it to -- have also linked KPI related to climate change to the compensation of executive management. And that's where we see a very big impact on companies considering climate change in their strategy. If we could move to the next slide, that would be great. So because companies are seeing climate change as an increasingly material topic, they are also improving the disclosure and performance on the topic. So as we can see here, in 2021, almost all sectors improved their score in climate strategy, the CSA criteria that considers the strategies implemented by companies to report on the risks and opportunities linked to climate change but also approaches for mitigation and adaptation. And I mean, this criterion has been aligned with the CDP, the global environmental disclosure framework for investors and companies. But in 2021, we also reviewed the criteria to also consider alignment with the TCFD framework and also element from the EU Taxonomy Regulation, such as approaches for adaptation to climate risk. With this new addition, the criterion has been made more challenging. And what we usually see when we add new questions to a criterion is that, usually, the average score decrease because companies need time to get used or to report according to the new question -- to the new benchmark that we're setting. But here, this is an exception. We've seen that despite the addition of many new questions and us raising the bar, companies have still been able to increase their performance on the topic of climate change, showing that many companies are really taking it very seriously and focusing their efforts on that topic. On the graph, we have -- we can make the same observation that Jennifer made, that most -- the most carbon-intensive sectors, such as your utilities, energy and material account for the highest score increase. So companies in those sectors will face the greatest climate-related risk in the short to middle term due to their physical -- so on the one side, due to the physical assets they have that are at risk because, most of the time, they are in a fixed location, but also because of like a specific regulation. So this require those companies to take measures now to adapt to those imminent climate risks. Whereas if we look at the health care sector here that is at the bottom end of the list, the risk that they are faced with are maybe more medium to long term. And therefore, the pressure to take measures and to really take climate change as one of the top priority is maybe smaller. If we now look at the next slide, please. So here, we dig a little bit deeper into the climate strategy topic and look specifically at scenario analysis. So one of the questions we are asking in a climate strategy topic focus on climate risk assessment for transition risks and looks at scenario analysis. So transitioning to a lower-carbon economy requires or contain a lot of policy, legal, technology and market changes that are necessary to address mitigation and adaptation to climate change. And depending on the nature, the speed and the focus of these changes, transition risk make those financial and reputational risks to organizations. So the CSA looks at whether companies assess transition risks related to climate change using scenario analysis, which kind of scenario they use and whether the scenario analysis extends beyond their own operation of the company to also look at upstream and downstream operations. So while we've seen on the previous slides that disclosure on climate risk has significantly improved over the last year, we see here that only a minority of companies are currently using climate scenario analysis for transition risks. The use of scenario analysis is quite important because it doesn't only allow to test the resiliency of a company's climate strategies, but it also helps companies avoid credit downgrades as climate events increase and as the transition progresses, but it also helps to inform stakeholders about how a specific company is positioning itself in light of all these risks like climate risk and opportunities. So as with the general performance on climate strategy and as -- with the TCFD -- alignment with TCFD, we have the same observation that carbon-intensive sectors are more likely to conduct scenario analysis, probably due to the larger impact of climate transition risk on the business but also due to the fact that there are many sectors -- specific regulation in those sectors, such as the EU Emissions Trading Scheme or the expectation for future carbon pricing initiatives. Scenario analysis is also a key recommendation of the TCFD framework, which demands that organization identify and define a range of different scenarios, among them a 2-degree scenario. And it's also part of EU Taxonomy Regulation. It's part of the climate change adaptation part of the Do No Significant Harm objectives. So as we've seen, scenario analysis, together with many other climate-related disclosure, is increasingly demanded by regulators. Companies will soon not have a choice anymore. But companies that are already preparing for future regulation should be able to avoid a part of the large business disruption and associated financial and reputation risk related to not adapting in time to climate change. So that was for my part, but I believe we now have a second poling question.

Yes. And thank you so much, Isabelle, for the really helpful overview of the CSA and the results of our latest research in the CSA. While we go ahead and pull up that second polling question, I think we can go ahead and ask you to address one of the questions we got from the audience, which we're getting a lot of great questions from the audience. So thank you for your engagement. But the question from the audience was how do companies participate in the CSA? Are they requested to do so? Do they need to be a constituent of a specific index? And how are the results from the CSA used and by whom? So that's really several questions that, Isabelle, I thought, while we're letting our audience answer the second polling question, perhaps you could just spend a minute answering that question about CSA logistics.

Yes. Sure. So the 2022 question I opened yesterday, and most of the companies would have received an invitation to participate. So basically, yes, we sent out invitation, and companies can just accept the invitation, and they are invited to and they can participate. I think the second question, how we use that. We have -- so we have a lot of different products, and this is that use the data, the original or the first one is the Dow Jones Sustainability Index, but there are a lot of different ESG indices that use the data. We are also -- we also have the data on CapIQ, so they are used by a lot of investors. And the platform is definitely very -- like you can have access to all the ESG data that we collect to the CSA. And I think there was a third question, but now I don't remember.

Yes. Sorry, the third part of that question, which I have also now forgotten, is do they -- how -- you answered how are the results from the CSA used and by whom. Do they need to be a constituent of the specific index? I think you've covered it, so thank you for that.

But I'm happy also to share the link after to our website where we have the explanation in much more detail with the link and all the different products and all the condition for participation. So I will share the link which will give much more detailed information than what I was able to give now.

Okay. Well, thank you for that quick overview. So now turning back to our polling question, which is something I'm really interested to see the results of after what we've heard today. The question is how useful is mandatory climate disclosure reporting. And we're asking is do we think mandatory reporting will encourage every company to report; mandatory reporting might help disclosure some, but there are lots of competing frameworks, and that doesn't help; and finally, climate disclosure reporting should be voluntary. [Voting]

So let's go ahead and take a look at what the results are from our audience members. Go ahead and advance that. Okay. So again, we're seeing this interesting breakdown where the largest percentage of people here, nearly 54%, I think, yes, mandatory reporting will encourage every company to report. But we've also got a fair chunk of the audience saying that there's a lot of competing frameworks, and that kind of speaks to what you were talking about, Jen, all this confusion. And then finally, you have nearly 8% of the audience saying that it should be voluntary. Isabelle, do these results surprise you at all?

Not really, no, but I'm happy to see that the majority of companies -- or participant think that mandatory reporting will encourage every company to report. What I fear and I've helped a couple -- heard a couple of times that, indeed, mandatory reporting help disclosure, but there are a lot of competing framework that might not confuse but give more work to companies. So I'm happy to see that still a majority see the importance of having mandatory disclosure. And I know there are also a lot of efforts to go in the same direction from the different framework, and that's also what we try to do in the CSA, to not ask a similar question but slightly different than an existing framework so that we kind of facilitate disclosure reporting and reporting for companies. So there are efforts going in that direction.

Great. Thanks so much, Isabelle. Again, we are getting some great questions from our audience. So I'm going to direct 2 of them that are sort of related to you, Jen. The first one is asking -- it's very interesting that carbon-intensive sectors are more proactive in climate risk management. In this case, how do financial institutions in the insurance sector take this trend into account in their own climate risk management? The audience member proceeds to say, I have seen increasing initiatives to reduce exposure to carbon-intensive sectors. Do financial institutions can ensure -- consider this proactive type of action by carbon-intensive sectors? And if so, how. So I wonder if you could speak a little bit to that question about financial institutions in the insurance sector, Jen?

Yes. I mean, there's definitely a move within the financial sector to address climate change risks, and they're actually under huge pressure to do so because they're financing oil and gas companies, they're financing coal companies. And some banks are actually coming out of these sectors are saying like we don't want to be involved in the financing anymore. And I think what's interesting is, basically, we have -- there's a French bank, BNP Paribas. It has -- it basically said a couple of years ago that it would lose up to 50% of its power clients because it had decided to stop financing coal. So obviously, that has an impact on the buying. And it has also said they want to see their clients at risk of having stranded asset. So that's kind of an example of what banks are doing. They -- a lot of banks say that they also are working with their clients to phase out exposure to like climate-risking sectors. So they may be working on helping to get a client to structure their activities to invest in more renewables or things like that. There's a big push there in the financial sector.

Great. Thank you. That's a really good example. And I remember that interview you did with BNP Paribas and that quote from I believe it was their Corporate Sustainability Officer. But that quote really stood out to me that they were willing to kind of part ways with some clients in order to stick to their climate goals. I think I'd like to follow that one up with a sort of related question from another audience member, which is for relatively low carbon-emitting sectors, such as services or IT, how are their climate risks different from carbon-intensive sectors?

Well, I mean, obviously, they're extremely different, and they're actually -- their emissions are actually less in the sense that it's not oil or gas or something like that. But they have supply chains. It depends on who their clients are. It depends also -- I mentioned supply chain. So obviously, the Scope 3 emissions, that has an impact as well because are they actually working with a company that, somewhere down the line, exposes them to that company's emissions with the Scope 3.? So those aspects to look at. I mean, what we found in the CSA that was quite interesting about the information technology sector was that their climate scores has actually improved by 14%. So I mean, they're obviously looking at climate as a risk, which I think is very interesting. So that's a couple of interesting points there.

Yes. And I think it's something you and I talked about in the past, I think we're only going to see this emphasis on Scope 3 emissions grow, and that's true for the financial sector certainly. And we saw Scope 3 emissions for large companies are part of the SEC proposal. So this question of how do you ensure, not just your own direct emissions, but those in your supply chain and other places is certainly something that we're seeing more focus on. Isabelle, I have another audience question for you that I'd like to ask, which is just how are carbon-intensive companies identified in CSA analysis? And is it based on any index?

Yes. Thank you for the question. So basically, the companies are classified into 61 GICS industry, and what I was mentioning in the presentation by mentioning carbon-intensive sectors really focus on the sectors and not on the companies themselves. So we used the GICS classification, and we have, yes, 61 industries. That's how we based the different -- like the analysis of less -- or less or more carbon-intensive industries. For the companies, obviously, we would need to go into the kind of the data point of each company to identify them. But in the presentation, I was really talking about industries more than companies.

Great. Thank you for that. And while we're talking just about the CSA, the question I have is what new questions are being added to the CSA this year to address this changing landscape for climate that we've been discussing today?

So next year, we'll introduce a new question, which is about the net-zero commitment of companies. That will be the only new question that we add because, this year, we've just added 4 new questions on TCFD alignment but also on, as I mentioned, climate risk assessment for physical risk and transition risk and also climate risk adaptation -- physical climate risk adaptation. And we also -- while we know the topic is very material and get more and more attention, we also try to not make changes every year to kind of have a continuation of the data and be able to compare the data from year to year. So this year, we decided the most material topic that we don't have yet in the climate strategy topic is net-zero commitment, and that's why we've added this question. We had a lot of other ideas, suggestions of ways we want to develop the criterion, but we try to keep that -- some stability over the years and not change half of the criteria every year.

Great. Thank you for that background and context. Now in your presentation, you showed the results of scenario analysis that was performed for transition risks. So what I'd ask, are you also looking at scenario analysis for physical risk? And if so, how do those results compare to the transition risk ones?

So yes, we have exactly the same question for transition risks and for physical risks. And surprisingly, the results are quite similar also with the most carbon-intensive sector scoring better, and they're more likely to have a scenario analysis. But what we have also here -- realized here is that when you look at physical risk, it's mostly geographically dependent more than sector dependent. Obviously, for the -- as I mentioned before, for the carbon-intensive sectors, which have physical assets in fixed location, they are really at risk. And for them, climate risk assessment for physical risk is very material. But for many other industries, they're more likely to have it because they have some location that -- some business locations that are really at risk and some that are less at risk. And in the end, they end up doing the climate risk assessment anyway. So that's probably one explanation that could explain why we have similar results between climate risk assessment for physical and transition risks.

Okay. That's great. Thank you. We continue to get a lot of great questions. And anything that we don't get to today, we will follow up with you afterwards. We really appreciate all of your engagement. This has been fantastic. I think we have time maybe for just one more quick one before we run out of our 45 minutes. And I think maybe one question that we could ask here is again for Isabelle. So CSA has introduced a question this year around targets endorsed by SBTi, or the Science Based Targets initiative. However, SBTi has really announced that it's not validating or endorsing any new SBTi targets. So the -- our audience member is asking, how will this impact the assessment? I'm not sure if that's something you're able to answer on the fly here, Isabelle, or if you'd like to follow up with that later. But I think it's an interesting one.

So I can maybe ask -- I can maybe give a quite general response. So the new question that was introduced indeed asked for validation, but this is a very, very small part of the question, and there are a lot of other elements that we are asking in the question. And a company that has a net-zero target with a target year that includes Scope 1, 2 and 3 and that -- where the target is considered to be Science Based, so such a company will already be performing quite well in the question. So we, on purpose, we didn't give too much importance on that part of the question because at the time we developed the question, there were very few -- none or very few companies that had validated target by SBTi. So yes.

Okay. Great. Thank you. And, Jen, I guess, maybe we can just end on a forward-looking note. If you could give our audience just a very quick overview of what they should expect next in terms of climate stress tests and results that are on the horizon because I know there's quite a bit coming in the near term.

Yes, exactly. So in May, we're going to have the Bank of England's climate stress test. And then in July, we're going to see the European Central Bank is actually going to be stress testing its own banking sector as well. It is an economy-wide stress test, as I mentioned before last year, but this one is going to specifically look at the banking sector itself. So it's very interesting what results of these will be, how they compare with other climate stress tests that have been done and should actually give a good idea of how banks are exposed to climate change.

That's great. Well, thank you so much for all your time today. Thank you to our audience for all of your questions. These are issues that we're going to continue tracking at S&P Global Sustainable1, both through the CSA, through our research and through our thought leadership, including through the ESG Insider podcast. We've covered a lot. So if you have any follow-up questions, please use the contact us widget, and we'll be happy to assist. And anyone who wants to review anything we covered, this session has been recorded, and you'll receive a copy shortly, so you can access it on-demand at your convenience. Finally, when we close out the webinar, it will be routed to our webinar survey form, and we would love to hear your feedback. So please take a couple of moments to fill that out. Jen and Isabelle, thank you again for your time today.

Thank you very much.

Thank you very much.