mco-20250317

Table 1 Climate governance leadership


Cross-functional Environmental Working Groups	• Executive Leadership Team	→ Comprised of the CEO and his direct reports, with oversight provided by the three Committees of the Board of Directors. → Serves as the decision-making body for key strategic sustainability efforts.
Cross-functional Environmental Working Groups	• • Corporate Sustainability Group	→ Evaluates Moody’s progress on sustainability issues across its business functions and generates sustainability recommendations. → The Vice President of Corporate Sustainability oversees the design and implementation of Moody’s corporate and climate sustainability, reporting to the Managing Director of GPRA and Head of Corporate Sustainability.
Executive Leadership	• President and Chief Executive Officer (CEO)	→ Oversees management’s climate assessment and mitigation of material climate risks and opportunities. → The CEO also serves on and periodically reports to the Board on climate-related issues.
	• Managin g Director of Risk Management	→ Responsible for escalating climate related risks as part of overall risk framework → Manages the Enterprise Risk Management (ERM) function, responsible for identifying and monitoring existing and emerging risks.
	• Managin g Director of Government & Public Affairs (GPRA) and Head of Sustainability	→ Responsible for monitoring current and emerging climate-related laws and regulations and their implications for Moody’s business. → Leads dialogue with key internal and external stakeholders on Moody’s value proposition. → Oversees Moody’s Corporate Sustainability Group, with managerial oversight for Moody’s sustainability activities.
	• Chief Finance Officer (CFO)	→ Oversees Moody’s finance function and works to embed sustainability and ESG into business-as-usual financial processes.
	• Senior Vice President Procurement & Sourcing Group	→ Oversees Moody’s supply chain and engages suppliers on climate action as set forth in Moody’s science-based targets.
	• • Chief People Officer (CPO)	→ Oversees the execution of the Company’s strategy to attract, grow and retain talent in service of the business, and identifies opportunities in employee engagement and development that align with the Company’s sustainability mission, such as the PurposeFirst, initiative, which is designed to enhance employee work flexibility.
	• Chief Administrative Officer (CAO)	→ Oversees strategic and operational initiatives, including the company’s global enterprise technology team, and identifies opportunities in Moody’s digital capabilities and IT infrastructure that align with the Company’s Decarbonization Plan, such as home office technology.
	• President of Moody’s Analytics	→ Oversees Moody’s climate offerings, and identifies opportunities in Moody’s business that align with the Company’s sustainability mission.
	• President of Moody’s Ratings	→ Oversees the incorporation of ESG and climate considerations into credit analysis and credit ratings and identifies opportunities in Moody’s business that align with the Company’s sustainability mission.

EMBEDDING SUSTAINABILITY METRICS INTO EXECUTIVE

COMPENSATION

Moody’s Executive Leadership Team is accountable for achieving the Company’s sustainability goals, with

sustainability-related performance metrics included as factors in certain senior executives' compensation

since 2020. In 2021, these metrics were integrated into the Company’s Strategic and Operational (S&O)

metrics used to determine annual cash incentive payments for senior executives. Since 2022, sustainability

has been a core S&O focus for all eligible employees. Details on these remuneration policies can be found in

our 2024 Proxy Statement.

Strategy

Climate-related Risks, Opportunities and Time Horizons

This report details climate-related risks and opportunities relevant to Moody’s across three time horizons:

short-term (up to 2025), medium-term (up to 2030) and long-term (up to 2040). The short- and medium-term

time horizons are aligned with Moody’s near-term science-based targets and the Company’s financial and

operational planning timelines. The long-term horizon mirrors Moody’s commitment to achieving net-zero by

2040.

Risks and opportunities are evaluated against the Company’s financial materiality or where there is a

significant impact on the Company’s financial sustainability. The materiality and significance of these are

defined further in the scenario analysis section of this report.

Table 2: Summary of risks and opportunities significance results


Analysis	Significance Definition	2023 Results
Opportunities	• Moody’s assesses climate-related opportunities utilizing low, medium, and high impact levels on its business, strategy, and financial planning across each time horizon. Low impact opportunities, such as energy- efficient office practices, provide minor benefits without significantly altering the company's trajectory. Medium impact opportunities, like launching a climate-related product lines, present noticeable benefits and moderately change the Company's course. High impact opportunities can fundamentally transform a company's business and financial strategies, leading to significant changes in markets, revenue streams, cost structures, and risk profiles.	• Climate-related opportunities impact level remain medium and high for Moody’s both now and in the future.
Physical Risks	• Moody’s projections of the financial impacts of climate change on its business utilize the Annualized Damage Rate (ADR) metric, or the expected financial damage per unit of exposure. ADR is defined as the financial damage potential per $1,000 value of an asset or portfolio. The financial damage is compared to Moody’s financial materiality threshold to determine the significance of the impact.	• The maximum ADR reported in Moody’s physical peril analysis is 0.52. This implies that if an individual asset was valued at $1 million, the Company would expect to incur, on average, $520 in damages per year to that specific asset. Similarly, if a portfolio was valued at $100 million, an ADR of 0.52 implies that, on average, the Company would expect to incur $52,000 in damages per year across all locations that constitute the portfolio. This suggests that even in a high-emission future, Moody’s exposure to physical climate risks is unlikely to be substantially influenced by the climate scenario experienced between now and 2040.

1 ESG and Climate revenue from Moody’s Investors Service and Moody’s Analytics as of December 31, 2023.


Transition Risks	• Moody’s transition risk analysis reveals the gross annual cost of carbon pricing and renewable electricity procurement never exceeded Moody's financial materiality threshold, indicating that carbon pricing risks remain immaterial to Moody's.	• Changes in Moody’s EBIT from carbon pricing risks remain below 1%.
Climate- adjusted Probability of Default	Moody’s probability of default arising from climate-related physical and transition risks across the Company’s portfolio utilizes the EDF (Expected Default Frequency) metric, which measures the probability that a firm will default in one year. Default is defined as the failure to make scheduled principal or interest payments, or a bankruptcy filing. It is determined as the point in time where the market value of a firm’s assets falls below the book value of its liabilities.	• Moody’s credit risk remains under or nearly 1% across all assessed climate scenarios.

As a result of the scenario analysis, Moody’s has not incurred or identified any climate risks that are

considered significant or that exceed Moody’s financial materiality threshold (see Scenario Analysis Results

Summary section for further details).

Over the past few years, climate risk has been a strategic growth driver for the Company. In 2023, revenue

from our ESG and climate-related offerings was over $200 million 1. Moody’s expects that climate risk will

continue to drive value for the Company as market demand for data, analytics and insights on climate risk

and sustainable finance grow globally.

Several climate-related opportunities remain significant for Moody’s both now and in the future. These

opportunities are outlined in Table 3. Moody’s sustainability strategy, tailored and adapted over the years, is

designed to recognize and generate climate-related opportunities while simultaneously mitigating risks. Table

4 summarizes some core capabilities that embody the identified climate-related opportunities.

Table 3 Climate-related opportunities


Opportunity	Financial Driver	Impact Level			Strategy to harness opportunity
Opportunity	Financial Driver	Short-term	Medium-term	Long-term	Strategy to harness opportunity
Access to new markets	Increased revenue through access to new and emerging markets	Medium	Medium	High	Worldwide business risks are more complex, interconnected, and rapidly changing than ever before. In this era of Exponential Risk , it is critical to consider the implications of climate risk on business strategy, goals, and performance. Moody’s has developed flexible and comprehensive offerings to enable evaluation of physical, transition, and integrated climate risks. Moody’s capabilities are distinct because the Company builds solutions on a foundational financial intelligence with best-in-market innovation on climate science and modeling through notable acquisitions including RMS in 2021 and major investments in product and tech development. Moody’s physical risk offerings have been refined over 30+ collective years of interaction with hundreds of insurers that are subject to regulatory oversight. The transition risk solutions leverage the financial intelligence Moody’s has curated over decades bringing industry-relevant climate change context to the modeling of macroeconomic, policy, and credit indicators of business risk. Together, Moody’s integrated capabilities support scenario analysis, materiality assessments, and financial modeling of the complex and interconnected risks of climate change. Moody’s provides data and models of potential climate risk at the national, sub-national, portfolio, and asset class-specific scale to support customers’ existing risk management workflows. These tools enable transparent and robust integration of climate risk insight into risk assessments including investment due diligence, portfolio management, and regulatory reporting and disclosures.
Development of new products and services through R&D and innovation	Increased revenue resulting from heightened demand for products and services	Medium	Medium	High	Moody’s unique combination of trusted data, insights and analytical capabilities strongly positioned the Company to meet the growing demand for climate risk capabilities. This demand is only expected to increase with the emergence of voluntary disclosure frameworks on non-financial risks, as well as anticipated regulatory mandates on the disclosure of climate risks. Moody’s has made considerable progress in integrating climate risk capabilities from the 2021 acquisition of RMS, including the development of tailored solutions for segment-specific needs and ongoing refinement of climate risk in financial modeling delivering a uniquely comprehensive and robust offerings to customers worldwide (see Table 4). Moody’s helps customers to make better business decisions by incorporating a consistent view of the potential impacts from climate change on current and future risk. Moody’s solutions provide insight that scale to support customers from the early stages of strategy development with advisory and technical expertise to the self-service integration of detailed models into the most sophisticated customers’ internal workflow applications.
Memberships and climate change commitments	Increased revenue through access to new and emerging markets	Medium	Medium	Medium	Moody’s maintains memberships in numerous climate-related initiatives and industry working groups. This network allows the Company to obtain and contribute to market insights that facilitate the ongoing development of the Company’s climate-related risk products and solutions which in turn provides Moody’s with access to new and emerging markets. Additional benefits include opportunities to solidify Moody’s role as trusted provider of objective and validated risk data, analytics, and insight for better decision-making. Moody’s goal is to offer a partnership that gives customers and the market a comprehensive, global perspective and the confidence to act. Moody’s memberships include the United Nations Principles for Responsible Investment (UNPRI), Sustainable Purchasing Leadership Council (SPLC), and the Task Force for Nature-related Financial Disclosures (TNFD).

Moody’s climate-related opportunities arise from the physical, transition, and integrated climate risk data,

analytics, platforms, and advisory capabilities that helps customers integrate climate risk insight into their

existing risk management workflows.

Table 4: Climate risk capabilities


Key Theme	Capabilities
Climate Risk	→ Physical risk • Forward-looking data capturing exposure to climate hazards and financial impact, including: – PCR Corporates data covering over 22,000 entities (weighted toward - but not limited to - listed). – On-demand capabilities for any point on the surface of the Earth. – Coverage of 77,000 count of areas. – 30+ Global Climate Models for a wide range of climate hazards. → Transition risk data and analytics • GHG Emissions: Moody’s GHG emissions database includes both reported and estimated greenhouse gas (GHG) emissions data for millions of financial and non- financial companies, both listed and unlisted. Moody’s provides GHG emissions data to all customer segments, including banks, insurers, asset managers, corporates, and the public sector. – Reported GHG Emissions database: – Moody’s has an analyst team dedicated to collecting, managing, and distributing corporate GHG emissions data. – The database includes over 10,000 + assessed companies (listed & unlisted). – These emissions are based on reported data provided by the companies themselves and are subject to internal Quality Check (QC) processes. – Estimated GHG Emissions: – Moody’s provides emissions estimation values based on robust in-house emissions estimation models for companies that don’t disclose their emissions or have insufficient disclosed values. – Moody’s has multiple emissions estimation approaches, and a specific model is selected for a specific company based on available company information (i.e. physical factors, location, etc.), and underlying statistical analyses to determine “best-fit”. – Moody’s provides GHG emissions estimations for millions of companies across our internal Orbis database. – Moody’s GHG Emissions Team is a dedicated, global team comprised of Subject Matter Experts from multiple facets of the business. The GHG Emissions Team is constantly working to enhance current data and methodology for all clients. • Macro scenarios: Moody's has developed a set of climate risk scenarios using the Moody's Analytics Global Macroeconomic Model. These scenarios provide four alternative pathways forecasting the physical and transition risks to the economy for more than 70 countries and 18,000 macroeconomic variables with a 100-year horizon. This includes data on global CO2 emissions. • Temperature Alignment Data: Moody’s Temperature Alignment dataset conveys the projected trajectory of a company or portfolio’s GHG emissions and its estimated global implied temperature rise. It aims to address the increasing pressure of investors and companies to demonstrate measurable action towards achieving net-zero targets. → Integrated climate risk • Climate-adjusted Expected Default Frequency (EDF): determines the probability of default for companies and other asset classes, powered by Moody’s award-winning EDF model and covering physical and transition risk drivers. • Climate Risk Scenarios: assess macroeconomic drivers across a range of NGFS climate scenarios. • Carbon Transition Indicators (CTIs): CTIs are scorecard-generated and use quantitative data and indicators from issuers and third-parties to provide a transparent and objective starting point for our assessment of the credit risk a company faces from carbon transition risk. CTIs are an input to credit ratings and are assigned to issuers in sectors with high or very high carbon transition risk.
Sustainable Finance	→ Second Party Opinions (SPOs) of labeled green, social, sustainability and sustainability-linked debt issuances for corporate and sovereign customers. → Net-Zero Assessments (NZAs) providing forward looking opinions of the strength of an entity’s carbon transition plan.

Impact on Business, Strategy and Financial Planning

NONFINANCIAL MATERIALITY ASSESSMENT AND CLIMATE

In 2022, Moody’s refreshed the Company’s nonfinancial materiality assessment, which identified the key

topics relevant to both internal and external stakeholders and the continued business success of the Company.

Climate remained a high focus issue with significant influence on business success and a high level of

importance to business stakeholders. This supports the Company’s strategic emphasis on stakeholder

engagement for climate issues reflected in the Decarbonization Plan.

Table 5: Moody’s business, strategy and financial planning


Climate Theme	Our Action
Targets	→ In 2021, Moody’s announced its commitment to achieve net-zero emissions across operations and value chain by 2040, bringing the Company’s net-zero target forward by ten years. → To support Moody’s Decarbonization Plan, since 2020 the Company tied together its financial and climate performance. The compensation of Moody’s senior executives and key members of the Procurement team are linked to the Company’s performance along clearly defined ESG metrics and progress against its climate targets.
Disclosures	→ Moody's was recognized with CDP’s ‘A’ Score on Climate Action for the fourth consecutive year. → The Company was showcased in CDP’s 2022 Stories of Change publication, which acknowledges the acceleration of Moody’s net-zero target, brought forward to 2040. → Moody’s joined the United Nations Global Compact’s (UNGC) Early Adopters Program. The Company was one of the first to disclose using the enhanced Communication of Progress (CoP).
Acquisitions	→ Climate positively influences Moody’s product development and acquisition strategy. The 2021 acquisition of RMS improved the accurate identification of financial impact by catastrophes while accounting for economic risks, financial performance, and creditworthiness.
Stakeholder Engagement	→ Moody’s 2020 non-financial materiality assessment was refreshed in 2022, in part, to align its climate strategy with stakeholders’ expectations. → In 2022, Moody’s published its first U.S. Political Engagement Report. In addition to Moody’s Political Engagement and Public Policy Statement, the U.S. Political Engagement Reports recognize Moody’s role as a responsible corporate citizen in line with the Company’s commitments. → The Company became a founding member of the U.S. Economic Opportunity Coalition, a historic effort to catalyze and align public and private investments to accelerate inclusive economic growth.
Thought Leadership	→ In 2023, Moody’s published a case study on the company’s approach to Scope 3 GHG emissions disclosures and challenges faced. → In 2023, Moody’s released a GFANZ APAC region case study on Components of Financial Institution Net-zero Transition Plans, following the launch of the GFANZ APAC Network.

PHYSICAL AND TRANSITION CLIMATE RISK

While both physical climate and transition risks have the potential to impact any business, either now or in

the future, Moody’s has not experienced the realization of any financially material climate-related risks to

date. The Company’s forward-looking climate risk modeling affirms the understanding that climate is not

expected to materially impact Moody’s business in the future.

Regardless of the anticipated low impact of climate risks assessed over the long-term, Moody’s continues to

monitor and evaluate the materiality of these risks to inform its ongoing climate strategy. A breakdown of the

analyzed physical and transition climate risks are detailed in Table 6 and Table 7.

Resilience of Strategy (Scenario Analysis)

SCENARIO ANALYSIS RESULTS SUMMARY

Moody’s modeled the projected business impacts of physical and transition climate risks that may materialize

under a wide array of potential futures. Physical risks refer to those arising from acute climate events (e.g.,

extreme weather) and from chronic and longer-term shifts in climate (e.g., sea level rise). Transition risks

refer to those associated with achieving a lower-carbon economy, encompassing disruptions due to changing

policy, technology, market, legal and/or reputational conditions. The results of these analyses are summarized

in Table 6 and indicate a “low” impact level in all scenarios. These impact ratings are based on both a

qualitative analysis of Moody’s business model and the risk mitigating effects of Moody’s climate leadership;

and a quantitative analysis of results from Moody’s carbon pricing modeling, climate-adjusted probability of

default analysis, and modeling of physical risk hazards and climate-related financial impacts. To explore the

forward-looking impacts of physical and transition risks, Moody’s made use of climate scenario models

developed by the Intergovernmental Panel on Climate Change (IPCC) and the Network for Greening the

Financial System (NGFS). The complete scenario analysis results, as well as descriptions of the future

climate scenarios assessed, can be found in the Physical Risk Analysis and Transition Risk Analysis sections,

respectively.

2 Moody’s applies the IPCC Representative Concentration Pathways (RCP) scenarios for the physical risk scenario analysis. See the Physical Risk Analysis section for more information about RCP 4.5

and RCP 8.5.

3 Low impact: Not exposed or not significantly exposed to historical or projected risks; Medium impact: Exposed to some historical and/or projected risks; High impact: Exposed today and exposure

level is increasing.

Table 6: Physical risk scenario analysis results summary 2


Physical Risks Under IPCC Scenarios		Impact Level 3					Management and Mitigation
		Short-term	Medium-term			Long-term
Acute	Inland flooding	RCP 8.5					→ Moody’s updated the Company’s physical risk scenario analyses to explore the financial impacts of extreme weather events on the Company’s offices, data centers and employee remote work locations. Employee homes were projected to have the greatest percentage of asset value at risk, while offices were determined to be the least vulnerable. Overall, physical risks for Moody’s global real estate portfolio were found to be of low impact, suggesting that acute physical climate risks are not financially material for Moody’s. → Any acute climate-related risks to Moody’s supply chain form part of the Company’s supplier screening, selection, and due diligence processes. → Data centers operated by Moody’s are shifting to the cloud, lowering the Company’s direct exposure to acute physical risks. → Moody’s regularly assesses the physical risks to offices and data center locations to allow for appropriate resilience and mitigation measures, including guidance to employees on issues that could impact their ability to work remotely. → Moody’s provides remote connectivity and collaboration tools to enable employees to work from home in case of a disruption to normal business operations. → Moody’s is in the process of implementing enhanced risk management tools to enable the mapping of operational resiliency and assessments of business interruption risks, allowing Moody’s to further reduce recovery and interruption times.
		Low	Low			Low
		RCP 4.5
		Low	Low			Low
	Wildfires	RCP 8.5
		Low	Low			Low
		RCP 4.5
		Low	Low			Low
	Tropical cyclones	RCP 8.5
		Low	Low			Low
		RCP 4.5
		Low		Low	Low
Chronic	Heat stress	RCP 8.5					→ Across all time horizons and climate scenarios evaluated, chronic physical risks for Moody’s global real estate portfolio were found to be of minimal impact. → Moody’s expects comfort cooling operating costs to increase and will monitor such sites so that the Company can continue to source 100% renewable electricity.
		Low	Low			Low
		RCP 4.5
		Low	Low			Low


Chronic	Water stress	RCP 8.5			→ Moody’s analyses suggest that water stress primarily affects industrial assets. As Moody’s global real estate portfolio is comprised of commercial and residential assets, Moody’s exposure to this risk is considered minimal. Nevertheless, sites in regions that may be impacted are monitored in terms of contingency planning and adaptation measures installed at the city level. → High-risk sites are logged on Moody’s ERM registry to be assessed on an ongoing basis and key metrics are reviewed by the Real Estate team to enable early identification of rising consumption or costs.
		Low	Low	Low
		RCP 4.5
		Low	Low	Low
	Coastal flooding	RCP 8.5
		Low	Low	Low
		RCP 4.5
		Low	Low	Low

4 Moody’s applies the NGFS scenarios for the transition risk scenario analysis. See the Transition Risk Analysis section, as well as the NGFS Scenario Portal.

5 Low impact: Not exposed or not significantly exposed to historical or projected risks; Medium impact: Exposed to some historical and/or projected risks; High impact: Exposed today and exposure

level is increasing.

Table 7: Transition risk scenario analysis results summary 4


Transition Risks Under NGFS Scenarios		Impact Level 5							Management and Mitigation
		Short-term	Medium-term				Long-term
Technology	Costs to transition to lower- emissions technologies	Net-Zero 2050							→ Moody’s reduces its exposure to costs from energy markets and regulation change through the Company’s voluntary commitment to sourcing 100% renewable electricity across its operations. Moody’s transition scenario analysis reveals that under all assessed future scenarios, the costs of the Company’s procurement of renewable electricity is likely to be lower than the avoided costs of carbon pricing. Furthermore, Moody’s utility spend only represents 0.1% of the Company’s annual operating costs, which also diminishes its financial exposure to a potential increase in energy prices. → Technology risks are managed through portfolio-wide tracking of energy and utility usage, and by monitoring the availability of advancements in low-carbon equipment for the Company’s operations. Moody’s also works with relevant internal partners who assist in calculating the Company’s global footprint and devise recommendations to reduce energy consumption through the use of technological and sustainable enhancements in Moody’s offices and buildings.
		Low		Low				Low
		Divergent Net-Zero
		Low		Low				Low
		Delayed Transition
		Low		Low				Low

Market	Customer behavior	Net-Zero 2050							→ Moody’s exposure to market risk is mitigated by its monitoring of current and emerging market dynamics, and the proactive integration of ESG data and insights across the Company’s products and services. For example, climate considerations are further integrated into Moody’s flagship solutions, such as Moody’s EDF™ (Expected Default Frequency) model providing climate-adjusted Probability of Default for public and private companies. Moody’s also continues to build and expand Second Party Opinion (SPO) and Net-Zero Assessment (NZA) capabilities to better meet market needs.
		Low			Low	Low
		Divergent Net-Zero
		Low			Low	Low
		Delayed Transition
		Low			Low	Low


Reputation	Stigmatization of sector	Net-Zero 2050			→ As a firm that provides integrated risk assessment services for global customers across sectors, Moody’s recognizes the potential for stigmatization due to commercial ties with customers from emissions intensive sectors. Although revenue exposure to organizations deemed at high environmental risk is tracked by Moody’s, the total impact of this exposure is not considered material to the overall commercial strategy and mission of facilitating better decisions through transparency. → This risk is further mitigated through Moody’s focus on the integration of ESG considerations across its suite of products and services, including credit ratings and Moody’s Ratings Issuer Profile and Credit Impact Scores.
		Low	Low	Low
		Divergent Net-Zero
		Low	Low	Low
		Delayed Transition
		Low	Low	Low
	Increased stakeholder concern or negative stakeholder feedback	Net-Zero 2050			→ Though Moody’s most recent materiality assessment reconfirmed that climate-related risks are considered relevant and important by Moody’s stakeholders. Moody’s does not expect climate-related reputational risk to have a material impact on the Company, as its ongoing net-zero commitment and climate goals secure its position. Moody’s addresses stakeholder expectations through ongoing reporting transparency and stakeholder engagement on climate-related issues.
		Low	Low	Low
		Divergent Net-Zero
		Low	Low	Low
		Delayed Transition
		Low	Low	Low
Policy and legal	Increased costs of GHG emissions and procurement of 100% renewable electricity (cost expressed as % of 2023 EBIT)	Net-Zero 2050			→ Moody’s analysis of the potential costs of mandatory carbon pricing under multiple transition scenarios revealed that these costs are not material across all assessed time horizons. → Moody’s exposure to carbon pricing risk is mitigated by the Company’s 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.
		0.6%	0.7%	0.7%
		Divergent Net-Zero
		1.9%	1.8%	1.4%
		Delayed Transition
		0.1%	0.1%	0.5%


Policy and legal	Enhanced emissions reporting obligations	Net-Zero 2050			→ Increased emissions reporting obligations are considered highly likely across all assessed transition scenarios. The expected impact of such regulations is low as a result of Moody’s ongoing disclosure and reporting commitments. → Moody’s monitors relevant existing and emerging regulations regarding emissions reporting for ongoing compliance.
		Low	Low	Low
		Divergent Net-Zero
		Low	Low	Low
		Delayed Transition
		Low	Low	Low
	Escalated mandates and regulations on existing products and services	Net-Zero 2050			→ Moody’s projects the impact of potential mandates on its products and services to be low, due to the Company’s ongoing strategy to incorporate climate considerations across its products and services. As detailed in the opportunities section (Table 3), Moody’s regularly seeks to develop and deploy opportunities to incorporate ESG metrics and insights to enhance its product offerings. → Risks resulting from potential non-compliance with all relevant current regulations are managed internally and collaboratively by a wide range of experts in Moody’s corporate governance model. These experts include representatives from Legal, Internal Audit, GPRA, Corporate Sustainability, Finance, and Regional Businesses.
		Low	Low	Low
		Divergent Net-Zero
		Low	Low	Low
		Delayed Transition
		Low	Low	Low
	Heightened exposure to litigation	Net-Zero 2050			→ Moody’s legal department is responsible for evaluating the risk of climate-related litigation, including from customers or third parties in connection with their use of Moody’s data. Moody’s ongoing focus on the quality of its data and dedication to remediating any gaps in best available information mitigates its litigation exposure risk relating to Moody’s data. → In addition, Moody’s is enhancing the rigor of its climate reporting processes through a recently implemented Environmental Management System. The system includes full accounting and disclosure of the Company’s GHG inventory, attainment of third-party assurance, and new internal systems and controls to track climate data. → Moody’s revised product offerings and climate-related analytical initiatives incorporate policy-related transition risk considerations, thereby assisting in managing Moody’s own transition risks.
		Low	Low	Low
		Divergent Net-Zero
		Low	Low	Low
		Delayed Transition
		Low	Low	Low

Physical Risk Analysis

6 The Moody’s modeling used is a pre-release deployment of CoD Pro (version 13) and the underlying modeling is subject to change.

7 The assessed employee home locations represent 88% of all Moody’s employees as of December 31, 2023.

METHODOLOGY AND PROCESS

Moody’s climate scenario analysis builds on the Company’s work conducted in previous years to evaluate its

climate-related risks. This analysis include quantifying the climate-related financial impacts of acute and

chronic physical risks across a range of scenarios and time horizons, using Moody’s latest modeling available

through Moody’s Climate on Demand (CoD) Pro product. 6 CoD Pro integrates Moody’s latest climate risk

models, which provide quantification of costs and damages from climate change across acute and chronic

risks for a range of scenarios and timeframes.

These capabilities allow Moody’s to:

→ Better understand the business implications of a range of physical climate scenarios.

→ Stress test the Company’s existing strategy.

→ Strengthen the Company’s resiliency to climate-related impacts.

Moody’s continues to monitor advancements in global emissions and climate policy to determine which

physical and transition drivers are most likely to materialize in the future.

The parameters of Moody’s physical risk analysis are provided in Figures 2-4, spanning the future scenarios

modeled, the climate perils assessed and the metrics underpinning the financial quantification of risk. This

analysis covers 100% of offices and data centers from Moody’s global operations as of December 31, 2023.

In addition, the impact of remote working capabilities is assessed via the quantification of risk to employee

home locations, 7 enabling Moody’s to better understand the implications of the Company’s hybrid work

model and strengthen its resiliency planning accordingly.

8 Moody’s physical risk analyses utilize inputs from the Coupled Model Intercomparison Project (Phase 6), https://pcmdi.llnl.gov/

CMIP6/ .

Moody’s applies the IPCC Representative Concentration Pathways (RCP) scenarios 8 to explore forward-

looking physical risks. As with Moody’s transition risk scenario analysis, physical risks are assessed across

short- (2025), medium- (2030) and long-term (2040) time horizons.

Figure 2: Physical scenarios evaluated


Scenario	IPCC Emission Scenario	Description	Outcome (Global Mean Surface Temperature Change relative to baseline)
Mid-range emissions scenario	IPCC Representative Concentration Pathway 4.5 (RCP 4.5)	An intermediate emissions scenario with moderate additional effort to constrain emissions.	This scenario is expected to result in global warming of 2.7°C by the end of the century, with a modeled temperature increase range of 2.4°C - 2.9°C. Physical risks are intermediate.
High emissions scenario	IPCC Representative Concentration Pathway 8.5 (RCP 8.5)	A very high GHG emissions scenario with emissions continuing to rise to the end of century.	This scenario is expected to result in global warming of 4.2°C by the end of the century, with a modeled temperature increase range of 3.7°C - 5.0°C. Physical risks are high.

Source: IPCC, https://www.ipcc.ch/report/ar6/wg3/downloads/report/IPCC_AR6_WGIII_FullReport.pdf.

Moody’s projections of the financial impacts of climate change on its business utilize the Annualized

Damage Rate (ADR) metric, or the expected financial damage per unit of exposure. ADR is defined as the

financial damage potential per $1,000 value of an asset or portfolio. For example, the maximum ADR

reported in Moody’s physical peril analysis is 0.52 (see Forward Looking Climate Risk). This implies that if

an individual asset was valued at $1 million, the Company would expect to incur, on average, $520 in

damages per year to that specific asset. Similarly, if a portfolio was valued at $100 million, an ADR of 0.52

implies that, on average, the Company would expect to incur $52,000 in damages per year across all locations

that constitute the portfolio. This metric enables comparisons between assets and portfolios on a normalized

basis and distinguishes between locations based on vulnerability of different property types, such as an office

block (commercial) versus a single-family dwelling (residential), as well as hazard level. The ADR therefore

incorporates the resilience attributes of Moody’s global real estate portfolio, including building attributes and

the geographic dispersion of its sites.

9 Moody’s CoD Pro application enables the Company to also model its exposure to earthquake risk, which informs the Company’s

operational strategy despite earthquakes not being considered a climate hazard.

Figure 3: Peril coverage of Moody’s physical risk analysis 9

The physical climate risk models produce the loss from damage and downtime to assets, incorporating tens of

thousands of bottom-up weather simulations. The models use asset location, replacement costs and building

attributes to calculate the severity of extreme physical events. The physical parameters of these events are

then converted into projections of damage and downtime losses.

Figure 4: CoD Pro’s unified risk assessment

PHYSICAL RISK ANALYSIS: PRESENT-DAY AND FORWARD-LOOKING

Present-day physical risk analysis results were determined by referencing data from a 2023 baseline year.

Forward-looking physical risk analysis results were focused on the long-term 20-year horizon; both a high-

emission and mid-case scenario were evaluated to integrate mitigation strategies into financial planning.

Across all examined scenarios (present-day and forward-looking), the projected impacts of physical climate

risk remained low and did not exceed Moody’s financial materiality threshold (detailed in the following

sections).

Present-day climate risk

To date, Moody’s has not experienced any material impact from physical climate perils. Similarly, Moody’s

analyses of present-day climate risks to its office spaces, data centers and employee remote working locations

confirm that these perils do not currently pose a material risk to the Company. The key findings of these

analyses include:

→ In a present-day climate risk, the ADR of each asset type remains very low and does not exceed 0.37 or

$370 in damages for every $1 million of exposure (Table 9).

→ Across the three asset types analyzed, employee remote working locations have the highest collective

risk, exhibiting an ADR approximately two times that of Moody’s offices and over 1.6 times that of its

data centers.

→ Geographically, climate risk for Moody’s is concentrated in the U.S., India, China and the U.K., which

represent a significant majority of offices and employee remote work locations as well as a plurality of

data center locations in addition to Belgium(Table 8).

→ Inland flooding was consistently revealed to present the highest risk to each asset type – contributing to

as much as 65% of total risk for Moody’s data centers and 40% of total risk to its offices. Moody’s

employee remote work locations also experience some vulnerability to coastal flooding and cyclones as a

result of their concentration along coastlines (Figure 7).

→ Figure 6 demonstrates that office exposure to inland flooding is globally distributed, while exposure to

other hazards is much more regionally concentrated. Moody’s coastal offices in the U.S., India and

eastern Asia are exposed to cyclones, while the Company’s offices on the U.S.’s West Coast are most

likely to be impacted by wildfires. In Europe, heat stress and inland flooding are the dominant perils.

→ As shown in Figure 5, Moody’s physical risk exposure from offices is largely driven by a few locations.

Moody’s Candor Techspace office in Gurgaon, India, and its headquarters in New York collectively

contribute to 46% of total office ADR, particularly due to these offices’ vulnerability to inland flooding

and cyclones, respectively. Together, 10 locations represent 71% of total present-day physical risk across

all of the Company’s offices, which serves to inform resiliency planning at these sites.

Table 8: Top five country contribution to risk exposure across all perils (based on number of locations)


Global Offices	Global Data Centers	Global Employee Homes
U.S. (23%) India (13%) China (7%) U.K. (6%) France (4%)	U.S. (38%) Belgium (10%) China (10%) India (7%) U.K. (7%) Canada (7%)	U.S. (39%) India (16%) U.K. (13%) France (4%) Costa Rica (3%)

10 The ADR metric provided is normalized based on the headcount of each office relative to Moody’s total headcount. This provides a

more relevant metric that sums to the Company’s aggregate ADR and accounts for the relative importance of each office from a

headcount perspective.

Table 9: Present-day physical risks by asset type and peril


	Asset ADR	Acute			Chronic
	Asset ADR	Inland Flooding	Wildfires	Tropical Cyclones	Heat Stress	Coastal Flooding	Water Stress
Offices	0.17	0.07	0.00	0.04	0.05	0.01	0.00
Data Centers	0.22	0.14	0.00	0.03	0.05	0.00	0.00
Employee Homes	0.37	0.12	0.02	0.10	0.03	0.11	0.00

Figure 5: Top ten Moody’s offices driving present day physical risk 10

Source: Moody’s Climate Change Models, https://rms.com/models/climate-change

11 The ADR metric provided is normalized based on the headcount of each office relative to Moody’s total headcount. This provides a

more relevant metric that sums to the Company’s aggregate ADR and accounts for the relative importance of each office from a

headcount perspective.

Figure 6: Distribution of office risk by geography and peril 11

Figure 7: Distribution of risk to employee remote work locations (all perils)

Source: Moody’s Climate Change Models, https://rms.com/models/climate-change

Forward-looking climate risk

Moody’s forward-looking analyses of the six assessed climate perils demonstrated that physical risks are

expected to have an increased impact by 2040 as compared to the 2023 baseline year. Across both the high-

emissions and mid-range emissions scenarios, each asset type exhibited an increase in ADR by 2040 ranging

from 29% (for data centers under a mid-range emissions scenario) to 63% (for offices under a high emissions

scenario). While the impacts of climate risks on Moody’s offices were projected to nearly double, the total

annualized damage ratio of each asset type was still considered to be minimal regardless of the scenario

applied (Figure 8). Furthermore, Moody’s observed very little differentiation in ADR between the high-

emissions and mid-range emissions scenarios across any of three asset types – both in each asset type’s total

ADR, and in the respective importance of each peril to that asset type. This suggests that Moody’s exposure

to physical climate risks is unlikely to be substantially influenced by the climate scenario experienced

between now and 2040. These results mirrored those of Moody’s climate-adjusted probability of default

analysis (p. 38). Both modeling exercises resulted in similar findings, confirming that while Moody’s

business may be affected by climate change now and in the future, this impact is not considered material or

significant.

Figure 8: Forward-looking physical climate risk by asset type, scenario and peril

Source: Moody’s Climate Change Models, https://rms.com/models/climate-change

Moody’s modeling of climate risk in the long-term time horizon resulted in similar conclusions to its present-

day analyses. Of note:

→ The projected ADR was again highest for employee remote working locations (reaching 0.52 per $1,000

under a high-emissions scenario), which was nearly 1.7 times that of Moody’s data centers and

approximately two times that of its offices. The risk associated with Moody’s offices increased the most

from the baseline year, but offices remained Moody’s lowest-risk asset type. The change in risk

associated with Moody’s data centers was considered minimal.

→ When breaking down Moody’s climate risk by peril, inland flooding remained the most consequential

hazard across all asset types, as it was the primary driver of projected financial damages (particularly for

data centers). For employee homes, however, coastal flooding yields the most significant risk both in the

present day and out to 2040 under both scenarios.

→ Furthermore, the projected risk was consistently higher in a high-emissions scenario than in a midrange

emissions scenario. The highest projected increases in ADR stemmed from coastal flooding and heat

stress for offices; heat stress for data centers; and heat stress, coastal flooding, and inland flooding for

employee remote working locations.

While Moody’s overall risk exposure to physical climate risks is low due to the Company’s diverse global

real estate locations and the robust mitigation strategies in place, it is noteworthy that acute risks were shown

to contribute to a higher percentage of ADR than chronic risks through 2040. Moody’s expects this trend to

ultimately change later this century as the impacts of chronic risks are increasingly felt over longer time

horizons. These findings will inform Moody’s business continuity planning and help the Company further

assess appropriate resilience measures for the management of its business.

Considering uncertainty in forward-looking projections

The CoD Pro product provides a comprehensive quantification of uncertainty around ADR values. The ADR

is an estimate of mean annual loss, while the uncertainty is the standard deviation of the annual loss.

The standard deviation has several components, which can broadly be categorized into primary uncertainty,

exposure uncertainty and secondary uncertainty. Primary uncertainty relates to uncertainty in climate

conditions between the years surrounding each reported time horizon, as well as whether an event is triggered

between years. Exposure uncertainty relates to the value of each location to the company as a whole. For

example, if there is a high-risk location but its value to the company is unspecified, the overall company

ADR is deemed more uncertain. The remaining uncertainty is the uncertainty in the size of loss for a location

if a peril event occurred. For example, a building with a high construction quality would observe lower losses

than a building with a lower construction quality at a given location. Characteristics such as construction are

not a user-defined input in CoD Pro but are considered in terms of uncertainty. Secondary uncertainty is also

impacted by correlation between locations. For example, if a company has three locations in close proximity,

they will all be impacted similarly by the same event. For low severity events, the losses would therefore be

lower and for high severity events, the losses would be larger. The resulting distribution of losses is greater

than if the buildings were independent of each other, resulting in an increased standard deviation value.

For present-day ADRs, Moody’s assets are ranked in the following order from high to low: employees, data

centers, offices (Figure 9). This order changes when considering the ADR plus the standard deviation, a

measure known as the “Risk Metric,” with data centers having the greatest uncertainty in risk. Unlike offices,

which are valued based on the headcount per office, neither data centers nor employee homes have any form

of exposure value attached, resulting in an extra uncertainty component. Data centers also have the fewest

locations and the highest concentration of exposure. The impact of a given peril event therefore has a wider

range of potential outcomes. Even when accounting for ADR and uncertainty distribution of its assets,

Moody’s has found that its financial exposure to climate perils remains very low across all asset types.

Figure 9: Uncertainty bands in forward-looking projections of ADR and risk metric, which incorporates

uncertainty across Moody’s global portfolio

Source: Moody’s Climate Change Models, https://rms.com/models/climate-change.

Transition Risk Analysis

METHODOLOGY AND PROCESS

Moody’s transition analysis explores the Company’s risk exposure resulting from the global shift to a low-

carbon economy (see Scenario Analysis Results Summary). To that end, Moody’s applied the latest NGFS

scenarios to stress test the Company’s resilience against multiple potential futures (including several net-zero

aligned futures), each with varying assumptions on the timing and scope of industry trends and regulatory

policies to limit global temperature rise (see Table 10).

The first three selected scenarios (Net-Zero 2050, Divergent Net-Zero and Delayed Transition) represent

those associated with the highest transition risks (i.e., those associated with the most ambitious or disruptive

policies to limit climate change), while the Nationally Determined Contributions (NDCs) scenario represents

a future with low transition risks. This selection allows Moody’s to explore the potential upper and lower

boundaries of its exposure to these risks and their projected financial impacts. As with Moody’s physical risk

analyses, transition risks were evaluated across Moody’s operations and supply chain and covered short-

(2025), medium- (2030) and long-term (2040) time horizons.

12 For a more detailed description of each NGFS scenario and its underlying narrative, see the NGFS Scenario Portal.

13 These scenarios were applied in the Climate-Adjusted Probability of Default analysis (see Figures 10-12).

Table 10 Transition scenarios evaluated 12


Scenario	Description	Outcome
Net-Zero 2050	Net-Zero 2050 is an ambitious scenario that limits global warming to 1.5°C through stringent climate policies and innovation, to reach net-zero CO₂ emissions around 2050.	50% chance of limiting global warming to below 1.5°C by the end of the century, with no or low overshoot (< 0.1°C) of 1.5°C in earlier years. Transition risks are high.
Divergent Net- Zero	Divergent Net-Zero reaches net-zero by 2050 but with higher costs compared to Net-Zero 2050, due to divergent policies introduced across sectors and a quicker phase out of fossil fuels. This scenario mimics a situation where the failure to coordinate policy across sectors results in an increased burden on markets, while decarbonization of energy supply and industry is less stringent.	50% chance of limiting global warming to below 1.5°C by the end of the century, with no or low overshoot (<0.1°C) of 1.5°C in earlier years. Transition risks are the highest of any NGFS scenario.
Delayed Transition	Delayed Transition assumes global annual emissions do not decrease until 2030, new climate policies are not introduced until 2030, and the level of action differs across countries and regions based on current implemented policies. This leads to a “fossil recovery” out of the economic crisis brought by COVID-19. Strong policies are then needed to limit warming to below 2°C and negative emissions are limited.	67% chance of limiting global warming to below 2°C by the end of the century. Transition risks are high.
Nationally Determined Contributions (NDCs)12	Nationally Determined Contributions (NDCs) include all pledged policies even if not yet implemented. This scenario assumes that the moderate and heterogeneous climate ambition reflected in the NDCs at the beginning of 2021 continues over the 21st century.	Emissions decline but lead nonetheless to about 2.6°C of warming associated with moderate to severe physical risks. Transition risks are relatively low.
Below 2 °C 12	This scenario assumes that climate policies are introduced immediately and become gradually more stringent though not as high as in Net-Zero 2050. Net-zero CO₂ emissions are achieved after 2070.	67 % chance of limiting global warming to below 2 °C. Transition risks are relatively low.
Current Policies 13	Current Policies assumes that only currently implemented policies are preserved. This scenario can help users consider the long-term risks to the economy and financial system if we continue on our current path to a “hot house world”.	Emissions grow until 2080 leading to about 3 °C of warming and severe physical risks. Transition risks are minimal.

INTERNAL CARBON PRICING

Moody’s continues to use an internal carbon price for business travel of $50 per mtCO2e to limit the

Company’s travel-related GHG emissions and to help fund climate-related initiatives.

CARBON PRICE MODELING

A key element of transition impact is the potential increase in carbon emissions pricing resulting from

regulatory mandates. This change would increase direct operational costs, including those related to energy

use, and indirectly increase costs related to the purchase of goods and services.

This analysis explores the possible costs of mandatory carbon pricing and its projected impacts on Moody’s

business during the transition to a low-carbon future. The Company’s modeling accounts for the associated

costs of continuing to procure 100% renewable electricity, which remains an ongoing commitment in

Moody’s pursuit of its science-based targets.

The results of this analysis are presented in Tables 11 and 12. As with previous iterations of transition risk

modeling, Moody’s determined that carbon pricing does not present a material risk to the Company under the

assessed time horizons and climate scenarios.

Moody’s direct operations are not emissions-intensive, and as such, the Company’s supply chain emissions

dominate its GHG inventory and are likely to be more sensitive to carbon pricing impacts. In 2023, Moody’s

Scope 3 emissions accounted for over 99% of the Company’s total emissions. These risks are largely

mitigated by Moody’s Decarbonization Plan and supplier engagement program, which reduces the projected

impacts of carbon pricing associated with purchased goods and services.

CARBON AND RENEWABLE ENERGY PRICING METHODOLOGY

→ Moody’s applied three of the latest NGFS low-emissions scenarios, as previously described in Table 10.

→ NGFS Phase III modeling was applied to future carbon prices; NGFS Phase II modeling was applied to

future renewable and non-renewable electricity prices.

→ Moody‘s carbon pricing risk scenario analysis is based on projections of the Company’s future GHG

emissions, covering Scope 1, 2 and 3 emissions and incorporating the Company’s near-term and long-

term science-based targets.

→ These models include the expected costs of continuing to procure 100% renewable electricity across the

Company’s global operations, based on Moody’s price predictions.

AVOIDED COSTS DUE TO MOODY’S DECARBONIZATION PLAN

Table 11 represents the avoided financial costs of carbon pricing due to Moody’s emission reduction and

renewable energy sourcing targets under each NGFS scenario (as reported in greater detail in Table 10). The

avoided financial costs highlighted in Table 11 are relative to the costs that would be experienced under a

hypothetical base case, in which Moody’s future emissions remain unchanged from the base year and regular

grid electricity is used at the offices. The avoided costs highlight the following findings:

→ Independent of the transition scenario, Moody’s Decarbonization Plan results in avoided costs and

improved financial performance in the long-term relative to a base-case scenario without climate action.

→ Independent of the transition scenario, Moody’s is no longer expected to incur additional costs related to

the procurement of 100% renewable electricity compared to the price of regular grid electricity. This is a

result of the reduced differential in renewable and non-renewable energy prices in the short- and

medium-term time horizons. It reflects the continued decrease in the costs of renewable energy sourcing.

→ Under the NGFS Divergent Net-Zero scenario, the application of Moody’s Decarbonization Plan results

in the greatest cost savings due to the rapid increase in carbon pricing inherent to that potential future

state.

The results in Table 11 uphold Moody’s understanding that maintaining the Company’s commitment to

procuring 100% renewable energy provides a net financial benefit, progress toward the Company’s climate-

related targets and the achievement of Moody’s stakeholders’ expectations.

Table 11: Avoided costs due to Moody’s Decarbonization Plan


	Avoided Annual Costs (million USD)
	Net-Zero 2050	Divergent Net-Zero	Delayed Transition
Short-term (2025)	$2.7	$9.7	$0.0
Medium-term (2030)	$6.4	$16.2	$0.0
Long-term (2040)	$22.5	$51.2	$15.7

Source: Calculations based on NGFS scenario.

14 Moody’s carbon pricing scenario analysis is based upon a projection of its GHG emissions across Scope 1, Scope 2 (market-based) and all reported Scope 3 categories. Future emissions were

modeled assuming that Moody’s meets existing science-based targets, and maintains a linear reduction trend after the target year and net-zero emissions by 2040. Additionally, future emissions

projection assumes continued achievement of 100% renewable electricity use across global portfolio. Simplified assumptions were made, including the assumption that the Company’s electricity

consumption, across all time-horizons, remains equal to the base year. The cost amounts reported include the gross cost of carbon pricing on its emissions each year, in addition to the scenario

dependent cost of renewable electricity procurement for 100% of global operations. Financial impact results are presented in the form of gross annual costs without applying a discount rate to future

values; this choice was made in acknowledgment of the concerns associated with underestimating the social cost of carbon.

Moody’s found that under each transition scenario, while the possible financial impacts varied over time frames, the gross annual cost never exceeded Moody’s

financial materiality threshold. These results have reinforced the importance of taking early, ambitious action on reducing Moody’s value chain emissions and

maintaining long-term progress towards net-zero. These modeling outputs continue to guide the Company’s climate action strategy.

Table 12: Gross costs of carbon pricing and renewable electricity procurement 14


	Net-Zero 2050			Divergent Net-Zero			Delayed Transition
	Carbon price	Cost	Relative impact	Carbon price	Cost	Relative impact	Carbon price	Cost	Relative impact
	USD/mtCO 2e	Gross annual cost of carbon pricing and 100% renewable electricity (million, USD)	Cost expressed as % of 2023 EBIT	USD/mtCO 2e	Gross annual cost of carbon pricing and 100% renewable electricity (million, USD)	Cost expressed as % of 2023 EBIT	USD/mtCO 2e	Gross annual cost of carbon pricing and 100% renewable electricity (million, USD)	Cost expressed as % of 2023 EBIT
Short-term (2025)	$69.7	$11.4	0.6%	$244.7	$37.3	1.9%	$0.0	$1.1	0.1%
Medium-term (2030)	$104.0	$14.2	0.7%	$263.1	$34.2	1.8%	$0.0	$1.0	0.1%
Long-term (2040)	$183.0	$12.9	0.7%	$416.5	$28.0	1.4%	$127.7	$9.4	0.5%

Source: Calculations based on NGFS scenario.

CRITICAL SUPPLIER ANALYSIS

Critical suppliers are those who provide fundamental services of strategic importance to Moody’s ongoing

operations. Supplier scoring was assessed through maturity across the quality of CDP climate disclosure and

science-based emissions targets.

Moody’s associates a higher level of climate maturity with reduced risks of pass-through costs linked to:

→ Carbon pricing.

→ Reduced risk of climate-linked business disruptions within its supply chains.

→ Heightened opportunities for engagement on climate issues including Scope 3 emissions reductions.

The results of the analysis are shown in Table 13. The outcomes of this assessment will be used to further

inform Moody’s supplier engagement strategy.

Table 13: Critical supplier engagement priority results


Engagement priority	% of critical suppliers
Low (progress on all three categories)	10%
Moderate (progress on two categories)	15%
High (progress on one category)	9%
Very High (no progress in all three categories)	66%

15 For more information on the NGFS scenarios that Moody’s has incorporated within its scenario modeling, see the Transition Risk

Analysis section (p. 33), as well as the NGFS Scenario Portal

Climate-Adjusted Probability of Default

For the second consecutive year, Moody’s evaluated its financial exposure to climate risks by assessing the

Company’s climate-adjusted probability of default using Moody’s CreditEdge Public Firm Expected Default

Frequency (EDF)™ model. This analysis models Moody’s probability of default arising from climate-related

physical and transition risks across the Company’s portfolio under different climate scenarios. These

scenarios are designed by the Network for Greening the Financial System (NGFS) to provide a common and

up-to-date reference point for understanding how climate change, policy and technology trends could evolve

in the future 15.

Moody’s climate-adjusted Annualized Expected Default Frequency is shown in Figure 10 by time horizon

(tenor) and broken down by climate scenario, with each scenario showing combined physical and transition

risks. The 20-year tenor period coincides with Moody’s own risk considerations in the long-term horizon as

previously defined in the Strategy section. Figures 11 and 12 show the difference in the forward EDF (the

percent change in EDF over time) by tenor and climate scenario for physical and transition risks,

respectively.

Using the CreditEdge Public Firm EDF TM Model

→ The model centers on the EDF metric, which measures the probability that a firm will default in one

year.

→ Default is defined as the failure to make scheduled principal or interest payments, or a bankruptcy filing.

It is determined as the point in time where the market value of a firm’s assets falls below the book value

of its liabilities.

→ Climate-adjusted probability of default (i.e., climate-adjusted EDF) considers the financial impacts of

physical and transition climate risks under different climate scenarios against a firm’s baseline EDF.

Physical risks impact asset valuation and asset volatility through the increased frequency and severity of

acute climate events, and transition risks can impact asset valuation, for instance, through increased taxes

on carbon emissions that may be passed across the supply chain.

→ Physical risks are modeled through combined top-down and bottom-up approaches. The top-down

approach leverages global damage functions in climate scenarios and the bottom-up approach uses

Moody’s facility-specific physical risk metrics to distribute the global damages into damages at the

company level.

→ Transition risks are modeled by leveraging an Integrated Assessment Model (IAM), the Global Change

Assessment Model (GCAM) and Moody’s firm competition model. The IAM model is used to capture

competition between sectors (inter-sectoral competition) under different climate scenarios. The firm

competition model captures the relative competitive performance of firms within a sector (intra-sectoral

competition), leveraging information on firms’ emissions and energy usage.

→ Combined risk refers to the combined projected impacts of physical and transition risks to an asset’s

valuation and asset volatility under each scenario.

The analysis highlighted three key findings:

1 Climate risks are not projected to have a material impact on Moody’s business: Although climate

risks are observed to increase Moody’s EDF relative to the Company’s baseline EDF term structure, the

company’s credit risk remains very low (less than 1%) across all tenor periods and across all climate

scenarios applied. This does not meet Moody’s financial materiality threshold as previously defined in

the Strategy section. Over the long-term, Moody’s performs best under the NGFS Divergent Net-Zero

scenario and worst under the NGFS Current Policies scenario.

Figure 10: Moody’s combined risk (EDF term structure by scenario)

Source: Moody’s Analytics CreditEdge, https://www.moodysanalytics.com/product-list/creditedge

2 Physical climate risks more directly impact Moody’s probability of default: While Moody’s credit

risk remains low across all scenarios, physical hazards were determined to have a greater influence than

transition risks on Moody’s probability of default. This is due in part to Moody’s Decarbonization Plan

and science-based targets, which mitigate the Company’s exposure to transition risks. Over the long-term

time horizon, physical risk is projected to increase Moody’s forward EDF by 53% in a best-case scenario

(represented by the NGFS Divergent Net-Zero scenario) and by 75% in a worst-case scenario

(represented by the NGFS Current Policies scenario). The impacts of physical risk on Moody’s credit

risk are of comparable magnitude across the different climate scenarios.

Figure 11: Moody’s physical risk (impact on Moody’s EDF by scenario)

Source: Moody’s Analytics CreditEdge, https://www.moodysanalytics.com/product-list/creditedge

3 Transition climate risks are more sensitive to climate scenarios: The impact of transition risks on

Moody’s EDF is far more dependent on the climate scenarios examined. Over the long-term time

horizon, Moody’s EDF is projected to increase by as much as 8% under a Nationally Determined

Contributions (NDC) scenario, but is projected to decrease by almost 9% under a Divergent Net-Zero

scenario. The scenario dependence of Moody’s credit risks informs the Company’s monitoring of global

trends in order to track which scenarios are increasingly likely to materialize.

Figure 12: Moody’s transition risk (impact on Moody’s EDF by scenario)

Source: Moody’s Analytics CreditEdge, https://www.moodysanalytics.com/product-list/creditedge

Integration of Climate Risks into Overall Risk Management

CLIMATE-RELATED RISK IDENTIFICATION AND ASSESSMENT

Moody's incorporates climate-risk into its company-wide risk management processes, providing a holistic

view of relevant risks through the use of a multipronged approach. Managed by the Managing Director of

Risk Management, the Enterprise Risk Management (ERM) function continually monitors a risk register.

Climate-related risks are aligned to the Moody's risk taxonomy, assisting in identifying significant risks and

opportunities.

Figure 13: Moody’s three tiers of risk

CLIMATE-RELATED RISK MANAGEMENT

Moody’s ERM function, based on the 2017 COSO framework, standardizes risk management across the

Company. The Sustainability team oversees climate-related risks and formulates response plans, while

physical climate risks are managed by ERM, Crisis Management, and Global Business Resiliency teams.

Transition climate risks are assessed by relevant business functions and reviewed by the Sustainability team.

Moody’s Enterprise-wide Risk Committee, comprised of the CEO and the Executive Leadership Team

(ELT), reviews the ERM's work and conducts independent risk reviews. The MD of Risk Management

oversees and monitors potential material risks, and material climate-related risks and mitigation actions are

periodically presented to the ELT and the Board.

Moody's also continuously updates its risk management practices with emerging capabilities and best

practices. The Company seeks to maximize the use of data and metrics to understand how risks evolve and

compare to internal expectations. Moody’s anticipates the integration of additional data and management

tools to track risk management insights and enhance the Company’s resiliency prioritization in the future.

Figure 14: Three lines of defense – climate risk management

Metrics and Targets

Metrics to Assess Climate-related Risks and Opportunities

CARBON-ADJUSTED EARNINGS PER SHARE

Moody’s has examined the potential impact of carbon pricing on the Company’s share price. The Company

calculated its 2023 carbon-adjusted diluted earnings per share (EPS) by applying the 2023 costs of carbon

pricing as projected by several NGFS transition scenarios, as well as Moody’s internal carbon price on

business travel. These results are described in Table 14 and summarized below:

→ Mapping the theoretical global carbon prices inherent to each NGFS scenario onto Moody’s 2023

emissions was found to have a very low impact on Moody’s carbon-adjusted EPS (diluted weighted

average shares outstanding), always remaining under or nearly 1%.

→ The Delayed Transition scenario does not apply a carbon price in 2023 and therefore has no impact on

the Company’s EPS.

→ The Net-Zero 2050 scenario results in an approximate 0.29% reduction in Moody’s actual adjusted

diluted EPS. The Divergent Net-Zero scenario has the greatest impact with nearly 1% reduction due to

the higher carbon prices associated with that scenario.

→ Moody’s also mapped the Company’s internal carbon price onto business travel, which indicated an

increase from 2022, but still resulted in a negligible impact on EPS.

Table 14: Moody’s adjusted EPS based on carbon price scenarios


	Net-Zero 2050	Divergent Net-Zero	Delayed Transition	Moody’s internal carbon price
	Scope 1, Scope 2 (market-based) and Scope 3 emissions			Business travel emissions
Total 2023 emissions (mtCO 2e)	134,939	134,939	134,939	20,300
Carbon price (USD/mtCO 2e)	$41.80	$146.82	-%	$50.00
2023 pre-tax cost of carbon (million USD)	$5.64	$19.81	-%	$1.02
Carbon-adjusted net income (million USD)	$1,929	$1,915	$1,935	$1,934
Carbon-adjusted net income, net of tax (million USD)	$1,602	$1,591	$1,607	$1,606
Carbon-adjusted diluted EPS	$8.71	$8.64	$8.73	$8.73
% reduction from actual	(0.29)%	(1.02)%	-%	(0.05)%

Source: Calculations based on NGFS scenarios.

16 2019 utility spend data excludes data from RMS, which was acquired in 2021.

MOODY’S UTILITY SPEND

Utility expenses rose to nearly $4.5 million. However, utilities continue to represent a negligible percentage

of Moody’s operating costs (0.1%). A hypothetical 10% rise in utility and energy prices could raise electricity

spend by approximately $450,000 annually, or 0.01% of 2023 operating costs. This analysis supports the

conclusion that Moody’s is not sensitive to fluctuations in utility prices.

Table 15: Moody’s utility spend 16


	2019	2021	2022	2023
Utility expenditure (million USD, rounded)	$5	$2	$4	$4.5
Percent of operating costs	0.2%	0.1%	0.1%	0.1%

TRACKING CLIMATE-RELATED METRICS

Energy, waste and GHG emissions are tracked and monitored at a site level. Moody’s evaluates consumption

trends in order to identify, assess, manage and mitigate climate-related risks related to resource consumption

and GHG emissions. A summary of Moody’s utility expenditure is found in Table 15. Disruption time and

financial impacts caused by major climate-related events are also tracked across Moody’s entire portfolio,

which informs the Company’s resiliency planning.

17 Energy activity data includes all offices under financial control. Square footage includes Moody’s managed offices and excludes

shared-space offices due to data limitations. The impact is expected to be not material, with emissions in shared-space offices accounting

for approximately 0.4% of total GHG inventory in 2023.

MOODY’S ENERGY CONSUMPTION

Moody’s total 2023 operational energy consumption decreased by 18.4% compared to the previous year,

primarily due to a reduction in office space as the Company shifts towards a hybrid work model (see Table

16). Additionally, Moody’s energy intensity (on a per-sq ft basis) decreased by 21% in that same period. As

with previous years, Moody’s continued to source 100% renewable energy for its global electricity usage.

Table 16: Energy consumption metrics


Energy Consumption	2019	2021	2022	2023
Total energy (MWh)	48,251	27,969	29,019	23,687
Energy intensity ratio per sq ft (kWh/sq ft) 17	19.8	11.9	11.7	9.0
Scope 1 - direct
Natural gas (MWh)	5,211	4,299	3970	2,658
Other direct (diesel, liquefied petroleum gas) (MWh)	918	75	238	365
Scope 2 - indirect
Total electricity consumption from operations (MWh)	36,477	20,619	21,406	18,192
Renewable electricity use	11%	100%	100%	100%
Out of which covered by Energy Attribute Certificates purchased by Moody’s directly	0	87%	87%	80%
Other indirect (purchased steam and cooling) (MWh)	5,645	2,976	3,405	2,472
Electric power intensity ratios
Electric Power intensity ratio per $ million of revenue	6,926	3,190	3,915	3,075
Electric Power intensity ratio per headcount	2,834	1,532	1,484	1,336

SCOPE 1, 2 AND 3 EMISSIONS

Moody’s Scope 1, 2 and 3 emissions from 2019 to 2023 are detailed in Table 17. Emissions have been

externally assured and were calculated in accordance with the World Resources Institute (WRI) and World

Business Council for Sustainable Development (WBCSD) GHG Protocol Corporate Accounting and

Reporting Standard, Science-Based Targets Initiative (SBTi) Guidance and the latest SBTi Target Validation

Protocol.

Table 17: GHG inventory breakdown and intensity metrics


GHG emissions (mtCO 2e)	2019	2021	2022	2023
Scope 1	1,744	851	810	571
Scope 2 market-based	13,591	432	440	398
Scope 2 location-based	14,035	6,878	7,696	6,987
Scope 3	171,260	121,290	137,981	133,970
Purchased goods and services	122,500	102,900	106,100	94,400
Capital goods	5,600	7,900	9,900	6,700
Fuel and energy-related activities	3,100	230	200	160
Business travel	23,100	1,480	10,300	20,300
Employee commuting	10,400	208	1,300	3,100
Waste generated in operations	460	72	81	110
Investments	6,100	8,500	10,100	9,200
Total Scope 1, Scope 2 market-based, Scope 3	186,595	122,573	139,231	134,939
Scope 3 categories evaluated by Moody’s that are zero or not material
Upstream transportation and distribution	Emissions are included in purchased goods and services category
Upstream leased assets	Not relevant – All leases included in Scope 1 and 2
Downstream transportation and distribution	Not relevant – Moody’s does not distribute or transport products
Use of sold goods	Not relevant – Moody’s does not produce products that directly consume fuel or energy
End-of-life treatment of sold products	Not relevant – Moody’s does not produce physical products
Downstream leased assets	Not relevant – Moody’s does not own any assets that are leased downstream
Franchises	Not relevant – Moody’s does not operate any franchises

18 Emissions include all offices under financial control. Square footage includes Moody’s managed offices and excludes shared-space

offices due to data limitations. The impact is expected to be not material, with emissions in shared-space offices accounting for

approximately 0.4% of total GHG inventory in 2023.


GHG intensity metrics	2019	2021	2022	2023
GHG intensity (Scope 1 and Scope 2 mtCO2e/sq ft) 18	0.006	0.001	0.001	0.0004
GHG intensity (Scope 1 and Scope 2 mtCO2e/ $ million revenue)	3.0	0.2	0.2	0.2
GHG intensity (Scope 3 mtCO 2e/ headcount)	13	9	10	10
GHG intensity (Scope 3 mtCO 2e/ $ million of revenue)	33	19	25	23

CLIMATE-RELATED TARGETS

In 2023, Moody’s progressed its efforts to meet net-zero emissions by 2040 and made substantial headway

against the Company’s Decarbonization Plan, which includes the Company’s science-based targets as well as

Moody’s commitments to offset remaining emissions from operations, business travel and employee

commuting, procuring 100% renewable electricity. The Company established a long-term, SBTi-validated

net-zero target of 90% reduction of Scope 1, 2 and 3 emissions and progressed on near-term targets to reduce

GHG emissions.

2023 PROGRESS AGAINST THE DECARBONIZATION PLAN

→ Clean and Efficient Operations

• Procured 100% renewable electricity for global operations for the fourth consecutive year.

• Integrated eco-friendly practices through technology usage and operations:

– Initiated the implementation of a global printing solution that prevents unnecessary printing and

provides environmental offsets via PrintReleaf.

– Implemented a new workstation configuration that reduces power consumption, plastic usage, and

packaging waste.

– Ensured all purchased equipment by Moody’s is Energy Star and EPEAT certified.

– Maintained low levels of employee commuting through our hybrid work program, which includes

more technology-enabled work, enhanced digital capabilities and IT infrastructure to implement

work-from-home solutions.

• Implemented employee awareness campaigns, including participating in the Daylight Hour

campaign, organized by the Building Energy Exchange, and a car free week photo contest to promote

using alternative means of transportation.

• Progressed our 2022 plan to align global offices with our Environmental Sustainability Policy and

held regular meetings with global office representatives to share best practices for emission

reduction. Through this plan, energy-saving measures were implemented throughout office spaces in

collaboration with the property management firms, including raising temperature set-points in tech

rooms, retrofitting air conditioning systems for lower global warming potential and reduced holiday

operations, limiting hot water supply from instant heaters, and fitting common areas with energy-

efficient lighting, timers, and sensors for reduced power consumption after hours.

→ Climate Policy

• Continued to apply an Internal Carbon Fee of $50 per CO2e on business travel.

• Continued to offset the Company’s remaining carbon footprint (including all emissions from

operations, business travel and employee commuting) back to 2000, when Moody’s became a public

company. This includes retrospective offsetting to account for the Company’s re-baselined emissions

footprint.

→ Supplier Engagement

• Increased the percentage of supplier spend covered by science-based targets from 49 to 54.

• Continued assigning monetary incentives to Procurement’s senior management and additional

incentives to key purchasers focusing on engagement with key suppliers that do not have science-

based targets.

• Continued efforts to update key supplier contracts with the requirement to disclose science-based

targets.

• Named a 2023 Supplier Engagement Leader by CDP for the fourth consecutive year, placing

Moody’s among the top 4% of companies assessed for supplier engagement on climate.

MOODY’S VALIDATED SCIENCE-BASED TARGETS AND PERFORMANCE AGAINST DECARBONIZATION PLAN


→ 50% Reduction in absolute Scope 1 and Scope 2 GHG emissions by 2030 from a 2019 base year.	→ 15% Reduction in Scope 3 GHG emissions from fuel and energy-related activities, business travel and employee commuting by 2025 from a 2019 base year.	→ 60% Of Moody’s suppliers by spend covering purchased goods and services and capital goods to have science-based targets by 2025.

→ 100% of continued renewable electricity sourcing for Moody’s global operations.

→ 100% carbon emissions offset from operations, employee commuting and business travel.

→ Long-term net-zero target of 90% emissions reductions in Scope 1, 2 and 3 emissions by 2040.

Moody’s applies a quality framework toward offset project selection, only funding certified projects. Moody’s carbon offset projects are chosen based on the

geographies where it operates, alignment with SDGs and co-benefits and are listed on reputable registries that guarantee third-party verifications.

→ Verra:

• Solar project: India

• Wind project: India and China

• Forestation: Brazil

→ American carbon registry:

• Forestation: U.S.

•

→ Gold standard:

• Boreholes: Uganda

• Cookstoves: Ghana and Uganda

Assurance Statements

2023 GHG Assurance Statement

2022 GHG Assurance Statement

2021 GHG Assurance Statement

2020 GHG Assurance Statement

2019 GHG Assurance Statement

About the information in this report

Certain statements in this report are aspirational or otherwise forward-looking statements. These statements are based on management’s

current expectations and are subject to uncertainty and changes in circumstances. These statements, including statements regarding the

goals of Moody’s Corporation and its subsidiaries (the “Company”), are not guarantees of future results or occurrences. Actual results

and financial conditions may differ materially from the Company’s expectations or predictions expressed in this report due to a variety of

factors, including, among others, global socio-demographic, political and economic trends, technological innovations, climate-related

conditions and weather events, legislative and regulatory changes and other unforeseen events or conditions, and the factors discussed in

the precautionary statements included in this report and those contained in the Company’s filings with the Securities and Exchange

Commission. The forward-looking statements are made as of the date of this report, and the Company undertakes no obligation to

publicly supplement, update or revise such statements on a going-forward basis, whether as a result of subsequent developments,

changed expectations or otherwise, except as required by law. In addition, while this report describes potential future events that may be

significant, the significance of those potential events should not be read as equating to materiality as the concept is used in the

Company’s filings with the Securities and Exchange Commission.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this document are forward-looking statements and are based on future expectations, plans and prospects

for Moody’s business and operations that involve a number of risks and uncertainties. The forward-looking statements in this document

are made as of the date hereof, and Moody’s disclaims any duty to supplement, update or revise such statements on a going-forward

basis, whether as a result of subsequent developments, changed expectations or otherwise. In connection with the “safe harbor”

provisions of the Private Securities Litigation Reform Act of 1995, Moody’s is identifying certain factors that could cause actual results

to differ, perhaps materially, from those indicated by these forward-looking statements. Those factors, risks and uncertainties include,

but are not limited to the impact of general economic conditions, including inflation and related monetary policy actions by governments

in response to inflation, on worldwide credit markets and economic activity and its effect on the volume of debt and other securities

issued in domestic and/or global capital markets; the global impacts of each of the conflict in Ukraine and the COVID-19 pandemic on

volatility in world financial markets, on general economic conditions and gross domestic product (GDP) in the U.S. and worldwide, on

global relations and on the Company’s own operations and personnel; other matters that could affect the volume of debt and other

securities issued in domestic and/or global capital markets, including regulation, credit quality concerns, changes in interest rates,

inflation and other volatility in the financial markets, as well as the number of issuances of securities without ratings or securities which

are rated or evaluated by non-traditional parties; the level of merger and acquisition activity in the U.S. and abroad; the uncertain

effectiveness and possible collateral consequences of U.S. and foreign government actions affecting credit markets, international trade

and economic policy, including those related to tariffs, tax agreements and trade barriers; the impact of MIS’s withdrawal of its credit

ratings on Russian entities and of Moody’s no longer conducting commercial operations in Russia; concerns in the marketplace affecting

Moody’s credibility or otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings; the

introduction of competing products or technologies by other companies; pricing pressure from competitors and/or customers; the level of

success of new product development and global expansion; the impact of regulation as an NRSRO, the potential for new U.S., state and

local legislation and regulations; the potential for increased competition and regulation in the EU and other foreign jurisdictions;

exposure to litigation related to Moody’s rating opinions, as well as any other litigation, government and regulatory proceedings,

investigations and inquiries to which Moody’s may be subject from time to time; provisions in U.S. legislation modifying the pleading

standards and EU regulations modifying the liability standards applicable to credit rating agencies in a manner adverse to credit rating

agencies; provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the

expansion of supervisory remit to include non-EU ratings used for regulatory purposes; uncertainty regarding the future relationship

between the U.S. and China; the possible loss of key employees and the impact of the global labor environment; failures or malfunctions

of Moody’s operations and infrastructure; any vulnerabilities to cyber threats or other cybersecurity concerns; the timing and

effectiveness of Moody’s restructuring programs, such as the 2022-2023 Geolocation Restructuring Program; currency and foreign

exchange volatility; the outcome of any review by controlling tax authorities of Moody’s global tax planning initiatives; exposure to

potential criminal sanctions or civil remedies if Moody’s fails to comply with foreign and U.S. laws and regulations that are applicable in

the jurisdictions in which Moody’s operates, including data protection and privacy laws, sanctions laws, anti-corruption laws and local

laws prohibiting corrupt payments to government officials; the impact of mergers, acquisitions, such as Moody’s acquisition of RMS, or

other business combinations and the ability of Moody’s to successfully integrate acquired businesses; the level of future cash flows; the

levels of capital investments; and a decline in the demand for credit risk management tools by financial institutions. These factors, risks

and uncertainties as well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those

contemplated, expressed, projected, anticipated or implied in the forward-looking statements are described in greater detail under “Risk

Factors” in Part I, Item 1A of Moody’s annual report on Form 10-K for the year ended December 31, 2022, and in other filings made by

the Company from time to time with the SEC or in materials incorporated herein or therein. Stockholders and investors are cautioned

that the occurrence of any of these factors, risks and uncertainties may cause the Company’s actual results to differ materially from those

contemplated, expressed, projected, anticipated or implied in the forward-looking statements, which could have a material and adverse

effect on the Company’s business, results of operations and financial condition. New factors may emerge from time to time, and it is not

possible for the Company to predict new factors, nor can the Company assess the potential effect of any new factors on it. Forward-

looking and other statements in this document may also address Moody’s corporate responsibility progress, plans and goals (including

sustainability and environmental matters), and the inclusion of such statements is not an indication that these contents are necessarily

material to investors or required to be disclosed in the Company’s filings with the Securities and Exchange Commission. In addition,

historical, current and forward-looking sustainability related statements may be based on standards for measuring progress that are still

developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR

DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED OR OTHERWISE MADE AVAILABLE BY MOODY’S (COLLECTIVELY,

“MATERIALS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS

AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION

FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK,

INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER

OPINIONS INCLUDED IN MOODY’S MATERIALS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S MATERIALS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED

ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS,

OTHER OPINIONS AND MATERIALS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND

MATERIALS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER

OPINIONS AND MATERIALS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND

OTHER OPINIONS AND PUBLISHES OR OTHERWISE MAKES AVAILABLE ITS MATERIALS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE,

MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

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MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND MATERIALS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR

REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information

contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S

considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the credit

rating process or in preparing its Materials.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or

incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers,

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damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or

entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency

within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or

inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING,

ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds,

debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings

opinions and services rendered by it. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes.

Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service, Inc. and have also publicly reported to

the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Charter Documents - Director and Shareholder

Affiliation Policy.”

Moody's SF Japan K.K., Moody's Local AR Agente de Calificación de Riesgo S.A., Moody’s Local BR Agência de Classificação de Risco LTDA, Moody’s Local MX S.A. de C.V, I.C.V., Moody's Local PE

Clasificadora de Riesgo S.A., and Moody's Local PA Calificadora de Riesgo S.A. (collectively, the “Moody’s Non-NRSRO CRAs”) are all indirectly wholly-owned credit rating agency subsidiaries of MCO. None of the

Moody’s Non-NRSRO CRAs is a Nationally Recognized Statistical Rating Organization.

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761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and

that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating

is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

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proposed to be listed on Indian stock exchanges.

Additional terms with respect to Second Party Opinions (as defined in Moody’s Investors Service Rating Symbols and Definitions): Please note that a Second Party Opinion (“SPO”) is not a “credit rating”. The issuance of

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not subject to the regulations applicable to “Credit Rating Business” under the Financial Instruments and Exchange Act of Japan and its relevant regulation. PRC: Any SPO: (1) does not constitute a PRC Green Bond

Assessment as defined under any relevant PRC laws or regulations; (2) cannot be included in any registration statement, offering circular, prospectus or any other documents submitted to the PRC regulatory authorities or

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