Credit ratings have consistently been identified as critical components of the modern international financial architecture, playing a vital role in addressing market information asymmetries and facilitating investment. By guiding creditors with judgments on relative default risk, ratings influence the volume, cost and stability of access to market financing for countries around the world.
Recent global economic challenges – rising interest rates, increased sovereign borrowing costs, a wave of sovereign defaults and developing countries' growing reliance on private markets for debt financing – have placed credit rating agencies (CRAs) at the centre of development finance discussions. The 2024 Pact for the Future specifically noted UN efforts to engage with CRAs, and credit ratings have featured prominently in ongoing Financing for Development discussions leading up to the Fourth International Conference on Financing for Development (FFD4).
The First Draft of the FFD4 Outcome Document highlights several priority areas for reform, including enhancing methodology transparency, recognizing the benefits of voluntary debt restructurings, revising the sovereign ceiling rule, reducing over-reliance on ratings and strengthening inclusive dialogue through a potential UN-led structure.
Building on this momentum, this side event, held at UNHQ during the Fourth Preparatory Committee for FFD4, brings together key stakeholders from across the credit rating ecosystem to explore how ratings can better support financing for sustainable development.
It will offer a platform for participants to share perspectives and jointly explore practical ways to strengthen the credit dating landscape in support of sustainable development goals. Participants will include credit rating agencies, multilateral institutions, Member States, private sector actors, academics and civil society representatives.
Our discussions will focus on:
- Understanding the role of credit ratings in sustainable development finance, with a focus on understanding sovereign ratings and methodologies.
- Identifying challenges and opportunities for mobilizing private capital toward the Sustainable Development Goals (SDGs).
- Examining current regulatory frameworks governing credit rating agencies.
