Tony Chapelle – Agenda-A Financial Times service – October 24, 2011
Standard & Poor’s is putting corporate boards and managers on notice that its analysts take corporate safety measures into account when rating creditworthiness.
The rating agency recently released a four-part special report emphasizing the role that safety risks play in how S&P assesses an issuer’s ability to pay back bondholders and lenders.
“We’re trying to identify differences between companies,” says Steve Dreyer, the managing director who heads S&P’s global evaluations of companies’ enterprise risk management. While analysts can’t predict calamities at any particular company, he adds, they can assess how well each company addresses safety risks compared with its peers.
Even though the total number of workplace deaths and injuries fell from 2004to 2009 (see chart), the impact from catastrophic safety failures appears to be growing.
For example, BP’s Deepwater well blowout last year, which resulted in 11 deaths, was also the oil industry’s largest-ever accidental marine oil spill, according to S&P.
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