our methodology

assessing what is material

Our view is that materiality matters and what is material to E, S and G is best defined at the sub-sector level.

Kestrel Analysis and Scores reveal if bond-financed activities are aligned with sector-specific best practices to address greenhouse gas emissions, and the presence or absence of other beneficial sustainability attributes tied to impact and long-term credit performance.

our framework

We follow a robust and transparent methodology informed by the following primary sources:

The United States of America nationally determined contribution (NDC) in line with Article 4 of the Paris Agreement1

Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report2

Project Drawdown Framework for Climate Solutions

United Nations Sustainable Development Goals

United Nations Environment Program Finance Initiative

Financial Stability Board’s Task-Force on Climate-related
Financial Disclosures

Science-based Targets Initiative

International Capital Market Association (ICMA) Green Bond
Principles and Social Bond Principles

Climate Bonds Initiative Standard and Certification Scheme

EU Taxonomy for Sustainable Activities

EU Biodiversity Strategy 2030

Envision sustainable design protocols established by the American Society of Civil Engineers and the Institute for Sustainable
Infrastructure at Harvard University

five sustainable finance principles

Our methodology is grounded in science-based international standards, summarized in our Sustainable Finance Principles.


Transition to a decarbonized economy

Transition to a decarbonized economy

In every sector, there are immediate ways to decarbonize and best practices to reduce greenhouse gas emissions. Kestrel reveals the presence or absence of these best practices which indicate if investments are transition-aligned.


Integrate resilient and sustainable design features

Integrate resilient and sustainable design features

Infrastructure should be designed for resilience to diverse physical risks. Energy-efficient buildings are key to a low-carbon future.


Preserve, enhance, or restore natural capital

Preserve, enhance, or restore natural capital

The UN has declared a biodiversity state of emergency. Depletion and lack of stewardship of water, soil, air, plants, and animals is widespread and intimately linked to the changing climate. Ecosystem services, food security, human health, and community well-being all hinge on sound and restorative management of natural resources.


Promote a more equitable society and a just transition

Promote a more equitable society and a just transition

Inequalities are present in many forms in the US and will continue to incite hardships and division without comprehensive changes to policies and attention to equity when prioritizing activities for financing. A more equitable society is a prerequisite for a well-functioning and sustainable economy.


Disclose activities, impacts and risks

Disclose activities, impacts and risks

Transparency ensures accountability to constituents and investors alike. Without adequate disclosure regarding financed activities, it is impossible to collaboratively overcome society’s most pressing challenges.

how we apply these principles to produce original data

Kestrel evaluates the environmental and social characteristics of bond-financed activities for alignment with the five Sustainable Finance Principles. Our research includes: a review of the offering documents, reviews of publicly available information from the issuer and other reputable sources, and our own independent research.

Our evaluation framework is built around the concept of materiality. The material factors we consider are a result of deep understandings we’ve formed from over 20+ years of consulting with state and local governments on sustainable infrastructure and best practices to achieve multiple benefits, including social equity. Our methodology reflects the understanding that the best practices for positive environmental and social impact can vary greatly depending on the sector and sub-sector.

We use a sector-specific evaluation path to assess bond-financed activities on each Series. For E and S Impact Scores, 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.

The G score reflects the issuer’s transparency and disclosure when it comes to the bond-financed activities. Because the G score represents the availability and quality of relevant information about the bond-financed activities, it also reflects Kestrel’s degree of confidence on the E score and S score.

Kestrel Sustainability Intelligence is 100% original and independently developed, built on Kestrel’s foundation as the market leader for external reviews and authority on Green and Social Bonds in US public finance. Our data is backed by the quality and integrity we have brought to our advisory clients for more than 20 years.

Please contact us for our complete Methodology and Sector Materiality Guides (available to subscribers).

how we ensure consistent and replicable scoring

Integrity is a core value of our company, and we strive for excellence. We adhere to a comprehensive set of best practices designed to remove bias, ensure checks and balances, and provide assurance in our Sustainability Intelligence. Our analysts follow strict procedures, guided by our proprietary software to ensure a consistent approach to scoring. Our robust quality assurance and quality control procedures employ both automated methods within our software as well as experienced auditors and committee reviews to ensure data integrity.

Sector Materiality Guides

Our Sector Materiality Guides are developed by incorporating real-world best practices in sustainability, social equity and climate-action.  These Guides are grouped into categories and align with our five overarching Sustainable Finance Principles which underscore Kestrel’s evaluation approach to communicate what’s material in bond-financed activities.

Roads, Highways, Tunnels and Bridges                              K-12 Public Schools


Criteria below are available to data subscribers. Please contact us for a demo or to start a conversation.

Airports                                                            Power Sector

Public Transit                                                 Drinking Water

Stormwater                                                     Healthcare

Wastewater                                                      Housing