faqs / esg data

frequently asked questions

Through our work on green and social bonds, we shed light on the practices, policies, programs and investments needed to address our changing climate and societal challenges. Below are some of the questions we often hear from clients. Don’t see your question listed? Contact us — we’re happy to help!


Who is Kestrel?

Kestrel provides ESG Impact Data and verification services designed to bring greater transparency and insight to fixed income, helping to set the market standard for sustainable finance.

We are a team of environmental and social scientists, engineers, and finance professionals with deep, nuanced understandings of how state and local governments finance and deliver public projects. We understand the complex activities and infrastructure financed with municipal bonds and provide meaningful, material insights on their ESG characteristics with our innovative data offering.

We are also a leading provider of external reviews for green, social and sustainability bond transactions in US public finance, consistently garnering over 60% of the market share by par and by number of reviews. We are qualified to evaluate corporate and municipal bonds in all asset classes worldwide for conformance with international green and social bond standards.

What is Kestrel ESG Impact Data?

Kestrel ESG Impact Data is a benchmark for the municipal market, providing original analysis and transparency on environmental, social and governance (ESG) impacts of bond-financed activities and the presence of sector-specific risk mitigants. Quantitative scoring is provided on a 1 to 5 scale and is accompanied by qualitative data fields for context on what is material in each sector. Additional data fields convey alignment with UN SDG Targets, green or social bond eligibility, and other relevant data.

What’s included?

Kestrel ESG Impact Data provides a comprehensive assessment of real ESG risk mitigants and positive impact opportunities associated with individual municipal bonds.  With qualitative and quantitative data fields, Kestrel ESG Impact Data includes:

  • Four numeric scores, each on a scale of 1-5, where high scores reflect exemplary bonds with positive impacts and presence of risk mitigants:
  • Environmental (E)
  • Social (S)
  • Governance (Transparency) (G)
  • Total ESG Impact Score
  • Areas of Analysis, which identify the key drivers of each numeric score
  • Brief description of the bond use of proceeds and related environmental and social benefits
  • Alignment with the 17 United Nations Sustainable Development Goals and 169 Targets
  • Sources of repayment are identified and classified as either “generally acceptable” or “possible flashpoint”
  • Eligible green, social or sustainability bonds are identified, including unlabeled bonds
  • Climate risk disclosure score, which assesses the adequacy of climate risk information provided in offering documents
  • Green building and sustainability certifications for financed activities


Who is Kestrel ESG Impact Data for?

Kestrel ESG Impact Data is a global offering useful for all buy-side and sell-side fixed-income market participants. This includes asset owners, asset managers, other investors, banks and other financial institutions. Our independent, science-based assessments are also valuable to educational institutions, foundations, researchers and governmental agencies.

How can Kestrel ESG Impact Data be used?

Kestrel’s ESG Impact Data is a versatile offering. Possible uses include:

  • ESG Integration in Bond Trading – Identify bonds that meet certain ESG criteria to support efficient buy/sell decisions in primary and secondary markets. Select securities based on alignment with the just transition to a decarbonized economy. Enhance exclusionary strategies.
  • Construct and Manage Portfolios – Use Kestrel ESG Impact Data to construct fixed-income portfolios that include reductions in carbon emissions over time. Understand and communicate the ESG impact of bonds in portfolios.
  • Thematic Investing – Identify bonds that qualify for specific themes, like Clean Energy, Access to Education, Affordable Housing or the Just Transition.
  • Identify unlabeled Green, Social and Sustainability bonds – Identify unlabeled but eligible bonds in the primary and secondary markets.
  • Compliance – Meet your net zero investing and social equity commitments. Show compliance with internal and external investment mandates.
  • Impact Reporting – Communicate the true ESG impact of bond holdings with our use-of-proceeds-based UN SDG Goals and Target alignment. We include a narrative description of bond-financed activities and associated impact.

How does licensing work?

Our data is available by subscription. Please contact us to discuss your goals, learn more about licensing, and schedule a demo.

How is data delivered?

Data is delivered via a direct API or through your Bloomberg terminal. Customized data-delivery solutions are also available. Please contact us to discuss.

Does Kestrel offer customized data solutions?

Yes. Collaborating with market participants is a fundamental component of our firm’s mission.

Let’s start a conversation.

our approach

What’s unique about Kestrel scoring?

At Kestrel, we score the bond, not the issuer. We work at the series level (i) evaluating the use of proceeds, (ii) identifying the bond-financed activities’ impact on society and the environment, (iii) highlighting risk mitigants, and (iv) determining the degree to which the issuer has made this information readily available.

We follow a robust evaluation methodology to evaluate project impacts and key project details against industry standards, assessing each individual bond at the series level.


How does Kestrel evaluate bonds?

Our analysts, who are environmental or social scientists, are well-trained to follow a robust ESG scoring methodology that includes sector-specific evaluation criteria. These criteria reflect operationally-feasible best practices in sustainability, social equity and climate-action. These criteria are called “material factors” because they parse out the key aspects of bond-financed activities that truly drive impact in each specific sector.

Each sector or sub-sector has a baseline score which increases or decreases based on the presence of positive or negative material factors, respectively. Positive material factors represent sector-specific best practices. Frequently these best practices are also risk mitigants.

Why sectors and sub-sectors?

When it comes to evaluating environmental and social impacts, materiality varies greatly by sector and sub-sector. For example, think how different best practices could be between a landfill and a school, or a power utility and an airport. Kestrel has methodologies to identify specific material factors in over 140 sub-sectors. These guide us to look for the operationally feasible best practices that have the most potential for positive impact in each sub-sector.

Does your methodology support bonds that cross multiple sectors?

Yes. Our methodology is flexible and scalable, supporting multi-sector and/or multi-industry scoring.

How does Kestrel provide transparency on its own methods?

We strive to be transparent with our evaluation approach. The sector-specific material factors we identify are grouped into categories such as “Renewable Energy” or “Ecosystem Restoration” and are presented in our data. These categories align with five overarching Sustainable Finance Goals which are the foundation of Kestrel’s ESG Impact Data.

The five Sustainable Finance Goals we have defined are:

  1. Transition to a decarbonized economy
  2. Integrate resilient and sustainable design features
  3. Preserve, enhance, or restore natural capital
  4. Promote a more equitable society and a just transition
  5. Disclose activities, impacts and risks

For more information on our approach, see our methodology FAQs in the next section or  contact us to request our comprehensive scoring methodology document which includes a list of categories.

data methodology

Understanding Kestrel ESG Impact Data

Kestrel ESG Impact Data includes separate environmental, social and governance (transparency) scores as well as a Total ESG Impact Score for each bond. Each score is on a scale of 1 to 5, with 1 being a low score and 5 being a high score.

  • A bond’s environmental score (E score) reflects the presence or absence of material factors that advance three Sustainable Finance Goals: 1) transition to a decarbonized economy; 2) integrate resilient and sustainable design features; and 3) preserve, enhance, or restore natural capital . Industry-accepted best practices have been identified to advance these sustainable finance goals within each sub-sector. Bonds with high environmental scores finance activities that directly or indirectly reduce greenhouse gas emissions, incorporate sustainable design features, and/or incorporate nature-based solutions as appropriate for that sub-sector.
  • A bond’s social score (S score) reflects the presence or absence of material factors that indicate alignment with the goal of promoting a more equitable society and a just transition. Sector-specific best practices that foster improved access to essential services, affordable housing, food security, and/or socioeconomic empowerment are used in the evaluation. In assessing the social benefit characteristics, the primary purpose of the bond-financed activity or program as well as the population it serves is considered.
  • A bond’s governance score (G score) is a reflection of the transparency and disclosure regarding the bond-financed activities. The degree to which the issuer has made information about bond-financed activities readily available is assessed. Best practices that are considered include: clearly defined project sector(s), project location(s), purpose, rationale, and budget. The G score also serves as a degree of confidence score on the E score and S score.

What is the Total ESG Impact Score?

The Total ESG Impact Score is a weighted average of the E, S and G scores for each bond. This weighted score puts the ESG characteristics in a broader market context, allowing for comparison within and across sectors. For example, it is possible to compare school bonds to hospital bonds.

Weighting is assigned based on where the sector has the greatest opportunity for impact, and is founded in academic research and industry knowledge. For example, since the transportation sector contributes more than 25% of all US greenhouse gas emissions, and a sustainable future requires decarbonization of our transportation system, Kestrel weighs the environmental score for transportation bonds more heavily than the social score. Similarly, the primary benefit of a K-12 school is the opportunity for education, so the S score is weighted more heavily.

Weighting does not inherently prioritize certain sectors.

How does Kestrel assign UN Sustainable Development Goals (SDGs)?

The impact of each bond is aligned to the UN SDG Targets to provide additional insights and transparency about the sustainable benefits of the use of proceeds. The UN SDGs include 17 broad Goals for sustainable development, and each Goal has underlying sub-goals or “Targets” (totaling 169) that describe more detailed actions necessary to achieve a particular Goal. For example, UN SDG Goal 4 “Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all” has ten Targets. We have a consistent approach to assigning UN SDG targets based on bond-financed activities.

What are flashpoints?

We identify the source of funds for payment of principal and interest on each bond. These sources are also characterized as “Generally Acceptable” or “Possible Flashpoints.” Sources of repayment that are derived from potentially controversial sources of revenue are flagged as “possible flashpoints” in our data. This does not impact the score, but is provided as data for investors. A repayment source may be considered a red flag or a point of controversy by broadly accepted social, environmental, or moral standards, or by certain investors.  While Kestrel identifies possible flashpoints as part of the data feed, it is left to individual investors to decide if they want to act on this information.

A few examples of possible flashpoints in sources of repayment include revenues from: mining, tobacco, casinos, petroleum refining and oil and gas royalties.

Is more information about Kestrel's methodology available?

quality control and assurance

How does Kestrel ensure the integrity and quality of ESG Impact Data?

Integrity is a core value of the company. Analysts follow strict procedures, guided by automated methods in our proprietary software to ensure consistent scoring. This approach is designed to remove bias, and ensure quality, accuracy and consistency in the data. We use both human- and software-driven quality assurance procedures.

Is Kestrel ESG Impact Data considered independent?

Yes. Kestrel is an independent ESG data provider and observer in the fixed income market. We are not compensated by issuers for ESG Impact Scores, and issuers are not involved in the evaluation process. Our evaluation is conducted independently by Kestrel analysts using pre-defined sector-specific criteria. We are not affiliated with any rating agency.

How much does green or social bond eligibility drive scoring?

Green or social bond eligibility does not affect the score. Kestrel ESG Impact Scores are based on sector-specific methodologies that evaluate presence of risk mitigants and opportunities for environmental or social impact, whereas green or social bond eligibility is based on alignment with internationally accepted standards. Bonds may have high E or S scores and may not be eligible for green, social, or sustainability bond designations, and vice versa.


How do I know what goes in the score?

Kestrel scores are derived from evaluating bond-financed activities for environmental and social impact.

Our sector-specific material factors are grouped into categories such as “Renewable Energy” or “Ecosystem Restoration.” These categories align with the five overarching goals which are foundational to Kestrel’s evaluation approach to communicate what’s material in bond-financed activities:

  1. Transition to a decarbonized economy
  2. Integrate resilient and sustainable design features
  3. Preserve, enhance, or restore natural capital
  4. Promote a more equitable society and a just transition
  5. Disclose activities, impacts and risks

The Kestrel data product provides subscribers with detailed information about the contributing factors to each ESG score. Please contact us for more information.

Who sees my score?

Anyone who subscribes to our data can see all of the Kestrel ESG Impact Data on all bonds we cover.

Do I have to pay for a score?

No.  Kestrel ESG Impact Data is a subscription-based product available for market participants from both the buy-side and sell- side to purchase for a variety of uses.

What is the difference between Kestrel's ESG Impact Score and a Second Party Opinion?

A Second Party Opinion from Kestrel is a concise report that summarizes our holistic evaluation of how a bond aligns with internationally accepted green, social, and sustainability bond standards.

Kestrel ESG Impact Scores are based on sector-specific methodologies that evaluate bond-financed activities for presence of risk mitigants and opportunities for environmental or social impact.

Will my score be higher if I have a Second Party Opinion from Kestrel?

No. Kestrel Green, Social, and Sustainability Bond verification services operate independently from the ESG evaluation department. Bonds with Second Party Opinions are evaluated using the same methodology as bonds without Second Party Opinions.

Kestrel only provides Second Party Opinions (SPOs) on bonds that are eligible for green, social, or sustainability bond designation according to internationally accepted standards, and we have certain minimum thresholds for impact. We don’t provide negative Opinions. In general, we expect bonds with SPOs from Kestrel to have positive environmental or social impacts and additional transparency around uses of proceeds. Thus, they may have higher E, S or G scores. But, scores are not necessarily higher because an SPO is present.

Can I improve my score?

To evaluate bonds, Kestrel uses a variety of information that is publicly available at the time of review. If you think we have overlooked something important, please let us know.

For more general information about what kinds of activities can improve scores in each sector, please see our Sector Criteria.