Climate Change Data

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Profit

Environmental Achievements

• Reduced environmental impact through recycling and conservation programs; held an Earth Day Fair to educate employees on environmental responsibility; Moody’s corporate cafeteria received three green stars out of four by the Green Restaurant Association.
• Saved 4,789 trees, 23,497 gallons of oil, more than 2 million gallons of water, 203,556 pounds of wood resources, 1 million kWh of electricity, 498 million BTUs, 2,412 pounds of light bulbs, 114 pounds of non-PCB ballasts, and 38 pounds of batteries. Recycled 201 tons of paper, 168,088 coffee packets, and 375 gallons of cooking oil (converted to 334 gallons of automotive diesel fuel). Composted 28.17 tons of biodegradable trash. Donated more than 5,348 pounds of food to City Harvest.

Social Achievements

• Recognized as one of “The Best Places to Work” for LGBT Equality by the Human Rights Campaign; expanded Employee Resource Groups; celebrated the 10th Anniversary of The Moody’s Foundation, which contributed more than $4.2 million to nonprofit organizations; launched Moody’s Interview University for veterans; provided Hurricane Sandy relief; implemented employee-directed giving programs (Matching Gift, Dollars for Doers, Giving Cards).
• More than 70% of employees gave Moody’s an overall favorable rating in employee surveys. 90% of employees responded to the survey.

Governance Achievements

• Adherence to Moody’s Code of Business Conduct; Board of Directors with diverse skills and expertise; three standing board committees (Audit, Governance and Compensation, MIS); independent directors serve on Audit and Governance and Compensation Committees.

Climate Goals & Targets

Environmental Challenges

• Hurricane Sandy impacted Moody’s New York office and surrounding communities.

Mitigation Strategies

• Moody’s donated to the American Red Cross, the Mayor’s Fund to Advance New York City, and provided emergency grants to local Moody’s Foundation grantees affected by the storm; matched employee disaster relief contributions.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G3.1 (Level C+)

Third-party Assurance: LBG Research Institute

Awards & Recognition

• MCO Named one of 15 Top Stock Picks from Star Investors (Fortune Magazine 2013 Investors Guide)
• 2013 Best Places to Work — Human Rights Campaign’s Corporate Equality Index
• Best Investor Relations Group: Buy-Side Analysts from Institutional Investor
• Risk Magazine Firms of the Future
• Risk Magazine Reader’s Choice Technology Rankings
• AsiaRisk Magazine Reader’s Choice Technology Rankings
• Waters Magazine Rankings
• Barrie & Hibbert Awarded Top Honors for best economic scenario generation software by Insurance Risk magazine
• Structured Credit Investor readers rank Moody’s Analytics #1 in Customer Service
• MIS Named Best Credit Rating Agency in Institutional Investor U.S. Fixed Income Poll
• Asia Money Plus and EuroWeek Asia name MIS Best Regional Credit Rating Agency
• MIS Public Finance Group Wins the Municipal All-Star First Team by Smith’s Research and Gradings for eight years in a row

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Profit

Environmental Achievements

• Saved 2.2 million kWh of electricity through conservation programs
• Recycled 257 tons of paper

Social Achievements

• Launched Project THRIVE, a multi-year HR transformation initiative
• Launched HR Connect, an internal HR team for employee support
• Launched Moody’s Knowledge Portal (MKP) for employee training
• Rolled out global Workplace Flexibility Policy
• Offered LifeCare Resource and Referral Service for US employees
• Achieved 90% response rate on Business Effectiveness Survey, with 77% of respondents recommending Moody's as a workplace
• Conducted 6,000 D&I training hours through 17 ERG chapters
• Moody’s scored 100% on the Human Rights Campaign’s (HRC) Corporate Equality Index (CEI)
• Moody’s Foundation contributed $6.18 million to charitable causes and facilitated 14,794 hours of volunteer service
• 100% of Moody’s offices participated in the Afternoon of Service program, donating 14,794.5 hours

Governance Achievements

• 100% of employees trained in Moody’s Code of Business Conduct
• Independent directors serve on Audit and Governance and Compensation committees

Climate Goals & Targets

Supply Chain Management

Responsible Procurement

• Sustainable Sourcing Guidelines

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI 3.1 (Level C+)

Third-party Assurance: LBG Research Institute

Awards & Recognition

• Institutional Investor awards for Best Investor Relations, Best CEO, and Best CFO
• Human Rights Campaign’s (HRC) Corporate Equality Index (CEI) 100% score
• FinanceAsia Fixed Income Research Poll: Most Influential Credit Rating Agency in Asia

Environmental Metrics

ESG Focus Areas

• Empowering people with financial knowledge
• Activating an environmentally sustainable future
• Helping young people reach their potential

Environmental Achievements

• Achieved carbon neutrality for 2019 by purchasing verified carbon offsets
• 17% reduction in business travel emissions year-over-year
• 10% reduction in electricity use year-over-year
• Prague office achieved BREEAM Excellent certification

Social Achievements

• Launched Pathway to Prosperity initiative with America’s Small Business Development Centers
• Supported TechnoServe's Smart Duka initiative in Kenya
• Supported Brunel University USWAP program in London
• Supported Village Capital’s Finance Forward Latin America initiative

Governance Achievements

• Became a signatory to the Principles for Responsible Investment
• Joined the UN Global Compact
• Joined the Business Roundtable and signed its Statement on the Purpose of a Corporation
• Published new general principles for assessing environmental, social and governance (ESG) risks

Climate Goals & Targets

Environmental Challenges

• Defining material social considerations (intangible and difficult to measure)
• Reducing GHG emissions from Purchased Goods and Services (Scope 3)

Mitigation Strategies

• Published a formal classification of social risk considerations
• Implemented Travel Smart initiative to reduce business travel emissions
• Exploring setting science-based targets, implementing internal carbon pricing, and purchasing renewable energy

Supply Chain Management

Responsible Procurement

• Vendor Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Hurricanes and typhoons
• Heat stress
• Water stress
• Sea level rise

Transition Risks

• Increased pricing of GHG emissions
• Mandates and regulations on existing products and services
• Costs to transition to lower-emission technology
• Changing customer behavior
• Shifts in consumer preferences
• Climate-related risk analytics in ratings
• Stigmatization of sector
• Increased stakeholder concern or negative stakeholder feedback

Opportunities

• Market growth opportunity for ESG-related rating products
• Avoided costs from renewable technologies
• Market growth opportunity from shifting customer preferences
• Market growth opportunity from increased stakeholder concern

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Third-party Assurance: Apex Companies, LLC (limited assurance for GHG emissions)

Sustainable Products & Innovation

• ESG, sustainable finance, and climate risk data and assessments

Awards & Recognition

• FTSE4Good Index Series
• Bloomberg Gender-Equality Index
• JUST Capital’s JUST U.S. Large Cap Diversified Index
• Vigeo Eiris A2+ sustainability rating

Environmental Metrics

ESG Focus Areas

• Climate
• Diversity, Equity and Inclusion
• Responsible Sourcing
• Data Privacy
• Community Investment
• ESG Integration into Products and Services

Environmental Achievements

• Reduced Scope 1 and Scope 2 emissions by 86% from 2019 baseline
• Reduced Scope 3 emissions from fuel and energy-related activities, business travel, and employee commuting by 84% from 2019 baseline
• Achieved 100% renewable electricity use in global operations
• Offset annual and historical carbon emissions
• 26% of Moody's suppliers by spend covering purchased goods and services and capital goods have science-based targets

Social Achievements

• Launched TIDE high-potential initiative for women and diverse leaders (40% of participants received promotions or expanded roles)
• Launched Moody’s conectaMos mentoring program for Latinx employees
• Launched 16-week paid RE-IGNITE initiative to help relaunch careers of individuals who have taken a break from the workforce
• Established the $1.2 million Ray McDaniel scholarship program to support Black talent
• Committed $1 million over five years to promote equal justice and advancement of the Black community
• Awarded five Hispanic students college scholarships and held an eight-week mentoring program
• Launched Be Counted initiative for LGBTQ+ employee self-identification
• Launched Courageous Conversations to promote understanding of racial unrest
• Launched Moody’s Multicultural Customer Initiative, placing $6 million in deposits with Black-owned banks

Governance Achievements

• Published updated ESG Cross Sector Methodology with new ESG Issuer Profile and Credit Impact Scores
• Incorporated material ESG considerations into credit analysis
• Published ESG Risk Heat Maps for various sectors
• Integrated ESG into CreditView and Datahub, providing ESG data and scoring applications to over 22,000 users

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic
• Decreased diverse supplier spend due to increased software and hardware spending with larger suppliers and a large supplier losing its diversity status
• Cybersecurity threats related to remote work during the pandemic

Mitigation Strategies

• Enabled global workforce to work remotely
• Addressed health and well-being through mindfulness sessions and stipends
• Developed new solutions and adapted commercial products to help businesses and policymakers assess the risks of COVID-19
• Provided $21 million in complimentary access to products and services
• Expanded Moody’s Supplier Code of Conduct to encourage suppliers to report on energy consumption and GHG emissions and set science-based targets
• Enhanced training on cyber-attack management and strengthened IT infrastructure

Supply Chain Management

Responsible Procurement

• Moody’s Supplier Code of Conduct
• Human Rights Statement
• Monitoring sustainability risks in key suppliers using Orbis

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB, GRI, TCFD, WEF, UN SDGs

UN Sustainable Development Goals

• SDG 5: Gender equality
• SDG 9: Industry, innovation and infrastructure
• SDG 10: Reduced inequalities
• SDG 13: Climate action
• SDG 17: Partnerships for the goals

Moody's aligns its efforts with these SDGs through various initiatives related to gender equality, sustainable business practices, reducing inequalities, climate action, and partnerships.

Sustainable Products & Innovation

• ESG Solutions, Climate Solutions, SME Solutions, Index Solutions, Sustainable Finance

Awards & Recognition

• CDP 'A List' ranking for tackling climate change

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity & Inclusion
• Responsible Sourcing
• Cybersecurity & Data Privacy
• Employee Well-being
• Community Investment
• ESG Solutions
• ESG Integration

Environmental Achievements

• 92% reduction in absolute Scope 1 and Scope 2 GHG emissions from 2019 base year (compared to a target of 50% by 2030)
• 95% reduction in Scope 3 GHG emissions from fuel and energy-related activities, business travel and employee commuting from 2019 base year (compared to a target of 15% by 2025)
• 28% of suppliers by spend covering purchased goods and services and capital goods have science-based targets (progressing towards a target of 60% by 2025)
• Procured 100% renewable electricity

Social Achievements

• Commitment to maintaining pay equity; women earning $0.99 for every $1 earned by comparable men globally and non-white employees earning $1.01 for every $1 earned by comparable white employees in the U.S.
• Evolved engagement with diverse customers and underserved communities through the Creating Opportunities for Racial Equity (CORE) program
• Aligning to a single performance management approach globally to empower employees
• Donated more than $6 million in Moody's Foundation grants, corporate charitable contributions, value of volunteer hours and employee-driven giving

Governance Achievements

• More fully integrated sustainability-related performance metrics into annual compensation determination for all senior executives
• Updated Environmental Sustainability and Privacy policies
• Expanded voluntary sustainability disclosure in the Form 10-K and 10-Q

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Competition for talent
• Maintaining pay equity despite business and employee changes

Mitigation Strategies

• Developed alternative sourcing strategies
• Investment in employee engagement and well-being
• Dedicated resources to maintain pay equity and drive pay decisions based on legitimate factors

Supply Chain Management

Supplier Audits: 100% of key suppliers assessed

Responsible Procurement

• Supplier Code of Conduct
• Science-based targets for suppliers
• Supplier diversity program

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Heat stress
• Hurricanes
• Typhoons
• Sea level rise
• Water stress
• Wildfires

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI Standards: Core option, SASB Standard for Professional and Commercial Services, WEF International Business Council’s Stakeholder Capitalism Metrics

Third-party Assurance: LRQA (limited assurance for social metrics)

UN Sustainable Development Goals

• SDG 5: Gender Equality
• SDG 9: Industry, Innovation and Infrastructure
• SDG 10: Reduced Inequalities
• SDG 13: Climate Action
• SDG 17: Partnerships for the Goals

Moody's initiatives contribute to these goals through various programs and solutions

Sustainable Products & Innovation

• Climate Solutions suite
• ESG Score Predictor
• Temperature Alignment Data
• EU Taxonomy Alignment Screening
• SDG Alignment Screening
• Global Compact Screening

Awards & Recognition

• CDP A List for Climate Action
• Supplier Engagement Leader by CDP
• Best ESG Data Provider by Waterstechnology
• Climate Risk Solution of the Year by Environmental Finance

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity & Inclusion
• Business Ethics and Professional Integrity
• Risk Assessment and Management
• Responsible Sourcing
• Cybersecurity and Data Privacy

Environmental Achievements

• Became one of the first companies to have near- and long-term net-zero climate targets validated by the Science Based Targets initiative.
• Increased the share of suppliers by spend who have science-based targets to 49%, exceeding the internal annual target.

Social Achievements

• Progressed on the customer-focused diversity, equity and inclusion initiative, Creating Opportunities for Racial Equity (CORE), by joining the Economic Opportunity Coalition and depositing $1.5 million of treasury deposits into Black-owned banks (in addition to $10 million in 2021).
• Evolved the global employee well-being approach to place a greater emphasis on holistic wellness.
• Expanded learning and development offerings by launching Moody’s University, offering over 50,000 accessible learning materials for employees.
• Engaged communities through employees’ contribution of over 14,000 volunteer hours and more than $7 million in Moody’s Foundation grants, corporate charitable contributions, value of volunteer hours, and employee-led giving.

Governance Achievements

• The Board approved a Global Tax Policy aligning Moody’s tax practices with the Stakeholder Sustainability framework.
• Sustainability became one of the core Strategic and Operational compensation metrics for all applicable employees.

Climate Goals & Targets

Environmental Challenges

• Continued need to reduce energy consumption and greenhouse gas emissions across operations and value chain.
• Maintaining data integrity and elevating the rigor of disclosures.

Mitigation Strategies

• Implementation of various projects to promote energy efficiency (e.g., expanded initiative to increase temperature set-point in technology rooms, retrofitting air conditioning systems).
• Appointment of an ESG controller to ensure accurate and transparent regulatory ESG reporting.
• Enhanced data governance methodologies for environmental metrics.
• Operationalization of an environmental management system as a single source of truth for all environmental data.

Supply Chain Management

Supplier Audits: Nearly 500 top suppliers engaged; 100% of key suppliers assessed using Compliance Catalyst.

Responsible Procurement

• Supplier Code of Conduct
• Science-based targets encouraged in key supplier contracts
• Supplier Diversity Program

Climate-Related Risks & Opportunities

Physical Risks

• Climate catastrophes impacting global offices, data centers, and remote work

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI Standards: Core option, SASB Standard for Professional and Commercial Services, WEF International Business Council’s Stakeholder Capitalism Metrics

UN Sustainable Development Goals

• SDG 5: Gender equality
• SDG 9: Industry, innovation, and infrastructure
• SDG 10: Reduced inequalities
• SDG 13: Climate action
• SDG 17: Partnerships for the goals

Regular assessment of opportunities to align operations, initiatives, and partnerships with the SDGs.

Sustainable Products & Innovation

• ESG Insurance Underwriting Solution

Awards & Recognition

• CDP A List for Climate Action and CDP Supplier Engagement Leader (three consecutive years)
• Certified as a Great Place to Work® in the U.S. and India
• ESG Category Winner, Chartis RiskTech100® 2023
• Best ESG Reporting (large cap), IR Magazine
• America’s Most JUST 100 Company
• Bloomberg Gender Equality Index
• Menopause Friendly Workplace
• ESG Data Provider of the Year – Europe, Environmental Finance Sustainable Investment Awards 2022
• Best ESG Data Provider of the Year, Waters Rankings 2022
• Best Place to Work for Disability Inclusion, Disability Equality Index 2022
• ESG Data Vendor of the Year, Asia Risk Awards 2022
• Net Zero Transition Award, Reuters Responsible Business Awards 2022

Environmental Metrics

ESG Focus Areas

• Climate Change
• ESG

Environmental Achievements

• Reduced total energy consumption by 18.4% compared to 2022. Achieved 100% renewable electricity for global operations for the fourth consecutive year.
• Significant headway against the Company’s Decarbonization Plan, including science-based targets and commitments to offset remaining emissions.

Social Achievements

• Inclusion of sustainability-related performance metrics as factors in certain senior executives' compensation since 2020. Sustainability has been a core focus for all eligible employees since 2022.
• Named a 2023 Supplier Engagement Leader by CDP for the fourth consecutive year.

Governance Achievements

• Board oversees sustainability matters via the Audit, Governance & Nominating, and Compensation & Human Resources Committees.
• Embedding Sustainability Metrics Into Executive Compensation since 2020.

Climate Goals & Targets

Environmental Challenges

• Potential for stigmatization due to commercial ties with customers from emissions-intensive sectors.
• Increased costs of GHG emissions and procurement of 100% renewable electricity.
• Enhanced emissions reporting obligations.
• Potential mandates on existing products and services.
• Heightened exposure to litigation.

Mitigation Strategies

• Monitoring of current and emerging market dynamics, and the proactive integration of ESG data and insights across the Company’s products and services.
• Climate strategy, including validated science-based targets, commitment to sourcing 100% renewable electricity, supplier engagement program and application of an internal carbon price on business travel.
• Ongoing disclosure and reporting commitments.
• Ongoing strategy to incorporate climate considerations across its products and services.
• Legal department evaluating risk of climate-related litigation; focus on data quality and remediation of gaps; enhanced rigor of climate reporting processes through a recently implemented Environmental Management System.

Supply Chain Management

Responsible Procurement

• Science-based targets for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Inland flooding
• Wildfires
• Tropical cyclones
• Heat stress
• Coastal flooding
• Water stress

Transition Risks

• Technology costs
• Market changes
• Reputational risks
• Policy and legal changes
• Carbon pricing

Opportunities

• Access to new markets
• Development of new products and services
• Memberships and climate change commitments

Reporting Standards

Frameworks Used: CDP, SBTi, NGFS, IPCC, GHGs Protocol

Sustainable Products & Innovation

• Moody’s Climate on Demand (CoD) Pro product
• Climate-adjusted Expected Default Frequency (EDF)

Awards & Recognition

• CDP’s ‘A’ Score on Climate Action for the fourth consecutive year