Municipal Bond ESG Data & Ratings

Our evaluation criteria are sector-specific and carefully founded on reliable and material data points. HIP Investor’s ratings allow investors to see precisely how and where an issuer is generating its impact.

HIP Investor Ratings

HIP Impact Ratings are quantitative-based ratings to fund positive impact and optimized risk-adjusted investments.

Data Points
Impact Entities

Reduced Risk

HIP Municipal ESG Ratings are considered a measure of risk. Not only have we seen default in municipalities with historically low impact ratings, but HIP Investor clients have reported tighter spreads and lower price volatility for impact entities rating above 50%.

HIP Ratings & Metrics are refreshed and enhanced with best available data. When new data sources become available, HIP will amend their scorecards and build out analysis to best capture social and environmental impact.

When a municipal agency is not fulfilling its stated mission, it is likely be at a higher risk of mismanagement or default. When a hospital has poor patient outcomes, or a University has low graduation rates, it may not attract future patients or students (revenue). And when an energy utility is not preparing for a low carbon future, long term solvency could be questioned.

Impact Entity & Issuer Ratings

HIP Investor starts by rating “impact entities.” Impact Entities may be bond issuers, but can be more specific than an issuer. For example, when a government entity issues on behalf of a municipality, the Impact Entity will be the governmental unit. Similarly, when a unique use-of-proceeds makes a specific subsector rating more relevant, the Impact Entity will be more granular than the issuer.

To create HIP Ratings for Impact Entities, we use a systematic data-driven approach.

VanEck's podcast "Trends with Benefits" Interviews HIP Investor

R. Paul Herman, CEO and Founder of HIP Investor, is interviewed by Ed Lopez on VanEck's podcast Trends With Benefits. The two discuss the risks of climate change and the growing demand for investments in sustainable projects. Ed Lopez hosts. Sept 28, 2021. (35 minutes).

Listen to Interview

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Bond Buyer Interviews HIP Investor

Paul Herman and Adam Mason of HIP Investor examine environmental, social and governance risks, ratings disconnects, transparency needs and HIP’s deep dive into hospital systems. Paul Burton hosts. Recorded Dec. 14. (25 minutes).

Listen to Interview

Product Offerings

In addition to these data and ratings products offered by HIP Investor, we have maps available to map HIP’s framework to other popular frameworks, such as the UN SDGs.

  • Impact Entity Ratings
  • Weekly Primary / New Issuance Ratings
  • Batch Secondary Market Issuance Ratings
  • Pillar & Metric Ratings
  • Comprehensive Data
Example metrics image

To create HIP Ratings for Impact Entities, we use a systematic, data driven approach.

Step 1: Identifying Reliable and Material Data

HIP investor seeks out best available data sources and works within each sector to improve the framework over time. This iterative refinement requires a sector-specific experienced understanding of nuanced data. Our criteria are that data sources:

  1. Are reliable and verifiable
  2. Are material to the entities goals, impact, and scope of influence
  3. Have high coverage for bond issuers

Step 2: Create A Sector-Specific Scorecard

HIP Investor then creates a sector specific scorecard to capture the impact each issuing entity has on society and the environment, across the five HIP Pillars.

Step 3: Create Issuance Level Ratings

HIP reviews bond issuance official statements to assign an impact entity rating along with issuance specific use of proceeds analysis. Specified environmental or energy efficiency use of proceeds can receive a rating enhancement, while alternative use of proceeds, such as funding the construction of prisons or stadium arenas, can be excluded. This analysis is currently being used by fund managers and investment advisers in portfolio construction.

New Issuances
Several HIP Clients are requesting HIP issuance level ratings from preliminary official statement review. HIP reviews the upcoming issuances every week and returns ratings prior to the pricing date. This analysis is then being used by portfolio managers to decide which securities to purchase at initial offering to the market.

Maps to other frameworks
In addition to these data and ratings products offered by HIP Investor, we have maps available to map HIP’s framework to other popular frameworks, such as the UN SDGs.

*Pillar weightings differ within each sector based on what metrics are most material for that issuer type. Not all sectors contain all pillars, depending on data availability or materiality.

Customization, Powered By HIP

Take the HIP Ratings into your portfolio model to create a custom framework that suits your organization’s investment strategy.

License HIP Rating

Contact us for pricing and availability.

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HIP’s new Impact Investing Portal helps you identify dirty and low/negative impact investments that can be more risky and find replacements that support our changing economy