NEW YORK, July 21, 2021 /PRNewswire/ -- S&P Global Ratings said today that it has assigned Darling Ingredients Inc. (Darling) an ESG Evaluation score of 70. This score is the result of an ESG profile of 65 combined with strong (+5) preparedness. Higher numbers indicate stronger sustainability in our evaluations. The report is available here.
Darling's ESG Evaluation of 70 reflects the company's strong preparedness, excellent awareness of long-term disruptions, and overall effective management of environmental and social risks. We believe the company's innovative culture--as demonstrated by it being a first mover into emerging technologies, including the North American renewable diesel market--help to support its long-term resilience.
Our evaluation also reflects Darling's strategic role as a more sustainable alternative to traditional waste solutions and an active enabler of a circular economy within the environmental services industry. This is balanced by its supply chain's concentrated exposure to protein producers, which we view as having more environmental risk. In addition, we have a positive view of the company's customer engagement and track record of offering innovative and more sustainable alternatives to customers through its growing fuel segment. However, it is constrained by limited reporting and the community issues stemming from the odors its plants emit.
Darling is a waste-to-product company founded in 1882 and headquartered in Texas, U.S. The company's core business model involves transforming waste products from protein producers and renderers, restaurants, and other sources globally into marketable products, which reduces waste across the company's value chain.
What Is An ESG Evaluation?
S&P Global Ratings' ESG evaluation is a cross-sector, relative analysis of an entity's capacity to continue to operate successfully. It is grounded in how ESG factors could affect stakeholders, potentially leading to a material direct or indirect financial impact on the entity.
Our definition of stakeholders for a particular entity goes beyond shareholders to include employees, the local community, government, regulators, customers, lenders, borrowers, policyholders, voters, members, and suppliers. A high ESG evaluation score indicates an entity is relatively less prone to experiencing material ESG-related events, and is relatively better positioned to capitalize on ESG-related growth opportunities than entities with lower ESG evaluation scores.
First, we establish an ESG profile for a given entity, which assesses the exposure of the entity's operations to observable ESG risks and opportunities, and how the entity is mitigating these risks and capitalizing on these opportunities.
Second, we assess the entity's long-term preparedness, namely its capacity to anticipate and adapt to a variety of long-term plausible disruptions.
S&P Global Ratings currently evaluates over 70 entities across the globe; they have an average score of 69. Since the first ESG evaluation, published in June 2019, we have finalized ESG Evaluations across 21 sectors globally. By region, the highest average score is 69 for companies headquartered in North America.
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