Shell receives positive credit rating from Moody's

Moody’s Investors Service released a research announcement describing its short-term and long-term analysis of energy producer Shell. Due to what Moody’s described as a “more proactive approach than its rivals toward gradually changing its energy product mix, by developing and growing its New Energies business” the credit rating service predicts an improvement of Shell’s credit quality in the long-term, while remaining relatively stagnant in the short-term.

The credit rating service expects a significant shift toward low-carbon energy sources and away from fossil fuels by 2040. Shell’s positive long-term credit rating comes after Shell’s 2018 strategy for a transition to new energy in an effort to move toward the goals of the Paris Agreement. Moody’s expects Shell’s low-carbon energy investments into alternative energy production methods like biofuels to pay dividends in the coming decades.

This report from Moody’s comes near the recent acquisition of the climate risk-analysis and assessment firm Four Twenty Seven, reported on here. The acquisition of Four Twenty Seven demonstrated increasing consideration on the part of Moody’s given to climate concerns and new energy transitions and how these interact with a business’s ability to return investments. The prioritisation of climate concerns is apparent in Moody’s latest report on Shell, who may see new investment interest following the positive long-term credit rating.

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