US Municipal Bonds are a significant element of the portfolio of many fixed income investors, but have traditionally offered technical challenges to the responsible investor.

July 22, 2021

At the ESG Frontier: Understanding the U.S. Municipal Bond Market

Below is an excerpt from ISS ESG’s recently released paper “At the ESG Frontier: Understanding the U.S. Municipal Bond Market”. The full paper is available for download from the Institutional Shareholder Services (ISS) online library.


  • As the responsible investment market matures, it is extending its reach into parts of the world of finance that have not previously been exposed to environmental, social and governance (ESG) risk analysis.
  • Municipal Bonds (Munis) are securities issued by a range of government and related entities including States; Cities; Counties; School Districts; Hospitals and Health Care facilities; Transportation bodies; Water and Sewerage bodies; Higher Education entities; and Gas Districts.
  • ISS ESG Muni QualityScore provides a detailed assessment of the environmental and socioeconomic risks faced by upwards of 29,000 US cities and towns; 3,141 counties; and 13,500 school districts across all 50 US states.
  • Munis are identified by unique codes called CUSIPs. By matching these codes with geographical positioning data, ISS ESG Muni QualityScore clients are able to link each Muni to the specific ESG issues relevent to their location.
  • CUSIP is a nine-character code. The first six characters are known as the base (or CUSIP-6), and uniquely identify the issuer. Issuer codes are assigned alphabetically from a series that includes deliberate built-in “gaps” for future expansion. The 7th and 8th digit identify the exact issue.
  • GEOIDs are numeric codes that uniquely identify all administrative, legal and statistical geographic areas for which the US Census Bureau tabulates data. There are GEOIDs assigned for every City, Town, County, School District and State in America.
  • Municipal bonds can play a large role in shifting capital flows to investments that address societal issues and have a tangible impact on local communities.

Explore ISS ESG solutions mentioned in this report:

By John McLean, Executive Director, ISS ESG.

Share this
Share on twitter
Share on linkedin
Share on email