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The Role of ESG Factors in Corporate Credit Risk Assessment

Author

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  • Radostina Stamenova

    (University of National and World Economy, Sofia, Bulgaria)

Abstract

This study examines the role of environmental, social, and governance (ESG) factors in assessing corporate credit risk, with a particular focus on their integration into credit rating methodologies. Through a critical analysis of the scientific literature and the practices of leading credit rating agencies, it is proved that while ESG factors provide an important tool for risk identification, their integration into credit analysis is accompanied by significant challenges. The findings emphasize the need for a phased approach based on transparency, standardized methodology, and data reliability, enabling the validation of rating models while adapting them to the contemporary requirements of sustainable development.

Suggested Citation

  • Radostina Stamenova, 2025. "The Role of ESG Factors in Corporate Credit Risk Assessment," Nauchni trudove, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 303-315, June.
    • Handle: RePEc:nwe:natrud:y:2025:i:1:p:303-315
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    File URL: https://unwe-research-papers.org/bg/journalissues/article/11697
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    Keywords

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    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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