S&P Global Inc at JPMorgan Ultimate Services Investor Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Most people, I would say, are pretty familiar with S&P's Credit Ratings. It's got a great brand, and people are well acquainted with that business. But people might be a little bit less familiar with the non-Ratings businesses, the other 3 segments of the company. So before we jump further into the Q&A, I was hoping you could just take a few minutes, give a brief overview of the company, and how the product -- how the portfolio has really evolved in the company?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : So other than being great businesses, what ties together this portfolio of oil benchmarking and indices, et cetera, et cetera?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Okay, great. And we'll definitely drill more into some of -- a lot of what you just said, especially ESG later on. I would say S&P has seen a couple of years of increased investments in the last couple of years. There's been a flurry of product launches, some of whom you just mentioned before. What would you say, discuss some of these and maybe give us a sense of 1 or 2 or a couple of these that are the most exciting needle movers in the near term and long term?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : If you want to pick maybe 1 or 2 of these...

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : No problem.

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Okay, great. Maybe we'll talk about the Ratings business before we get on to some of the other areas like China, like Platts, Indices. Within Ratings, what significant changes do you envision for the business, for the industry, structure, better landscape, regulatory changes over the next 5, 10 years? What do you see as being areas that might evolve in this industry?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : That's perfect. So you mentioned China. So maybe you can talk a little bit about the company's strategy in China? Obviously, your main competitor globally has a little bit different strategy. So maybe I'll let you comment on -- there's 2 different paths as we sort of see it in terms of the domestic and the global market and whether you're operating as a stand-alone or operating in terms of a JV. What do you see as being the optimal strategy as it relates to China and the unique geopolitical risks and other environment dynamics that go on there?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Great. Turning to instruments, I guess, more U.S. global based. Your outlook for next year is for a 3% decline following a record historical 2020 due to central bank stimulus, et cetera. Maybe you can talk a little bit about some of the puts and takes in that outlook? What are some of the upside cases that could drive that issuance above 3 -- better than 3% decline or some of the variables that are really embedding some risk in that outlook and leading to declines?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Okay. Great. So I want to go back now to -- actually, before we move on, let's stay with Ratings. I was just thinking about Ratings margins. They've been really strong. They've been up over 100 basis points for 6 straight quarters. They were actually over -- they were up over 1,000 basis points for a couple of quarters, if you go back in the first half. So what has been driving this improvement in Ratings margins? And how do you think about the medium-term outlook for those margins?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : So if it's really very much a function of operating leverage, driven by the revenues. If you assume that revenues are getting down next year in Ratings or issuances will be down. Does it stand to reason that we should be looking for margins down next year in Ratings as well?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : And what was the reason for that? Remind us, me, please, and the audience how were margins able to stay up despite those low issuance trends?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Let's go back to ESG for a moment. You picked up on it. You mentioned that there's 3 kind of areas where you guys are targeting ESG and incorporating into the business. So maybe could you run through them exactly and explain them a little bit better, give us and the audience a better understanding of these different areas where you're integrating ESG into your portfolio?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Let me pause you on that, and we'll continue along these lines. I want to see there to be on the 4 parts of ESG in a second. But that's one pushback I get from investors, and then I hear where they're coming from, which is the self-reported data. There's a natural skepticism when a company themselves is giving that data, how do you really demonstrate the reliability, the accuracy of that data? Do you combine it with some web scraping to sort of sanity check? Because to me, it feels like how much could we know from that kind of data? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2020 / 8:25PM, SPGI.N - S&P Global Inc at JPMorgan Ultimate Services Investor Conference (Virtual)

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Got it. Okay.

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : And just a plan -- and not to believe in this part but to play devil's advocate. If it's all coming from similar sources anyway, whether you're scraping from those filings or they're self-reporting, and then why is there an advantage of the self-reporting versus the scraping anyway?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : I get it. And they are scrapping that information?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Got it. Okay. But I cut you off. So I'll let you continue along the ESG portfolio lines. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2020 / 8:25PM, SPGI.N - S&P Global Inc at JPMorgan Ultimate Services Investor Conference (Virtual)

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Great. No, that was a great overview. So let's pick up on one of the latter ones you mentioned, which is Platts and dwell a little bit into that business. It's obviously, a fantastic business, very resilient, as you put it before. How do you guys thinking about that franchise longer terms? You're still very leveraged to petroleum contracts, but the company has been diversifying into some other asset and classes and data analytics. So what are the initiatives within that franchise? And how you guys are thinking about the future of oil benchmarking?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : And what about the fact that we've had low oil prices? I get that it's a subscription business, it's a benchmark business, but I mean your customers are underpaying, how much of a challenge can that create for your business? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2020 / 8:25PM, SPGI.N - S&P Global Inc at JPMorgan Ultimate Services Investor Conference (Virtual)

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Maybe shifting gears to Market Intelligence. 2020 initiatives included, SME, data analytics, the data marketplace, climate analytics being brought to the MI platform. So if you can talk about how those things have gone so far?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : We only have about a minute. I want to make sure we touch on Indices as well. It's a business that's slowed down. It's been a great business over time but it slowed down recently. What is challenging in that business? And what should we expect going forward?

Question: Judah Efram Sokel - JPMorgan Chase & Co, Research Division - Analyst : Well, let's all hope you are rising markets and stability next year, right? Great way to end. Thank you very much, Chip. I appreciate you taking the time, and thank you to the audience for attending the conference and, of course, attending this session. Take care.