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    Prime sovereign ESG ratings

    Prime sovereign ESG ratings

    Environmental, social and governance (ESG) factors can have major implications for countries and the perceived creditworthiness of their debt.
    • Environmental risks – such as natural disasters, weather patterns and climate change – can all have a significant effect on a country’s economic and political outlook.
    • Social factors, such as demographic changes, can materially shift investors’ perceptions.
    • Governance factors ranging from the quality of institutional frameworks to respect for the rule of law can materially influence sovereign debt performance.

    We decided to apply our years of experience in analysing ESG risks to generate sovereign sustainability measures that we believe more reliably and accurately reflect material risks and alignment with broad ESG goals.

    2

    Ratings for each country: focusing on ESG factors and positive impact outcomes

    123

    The number of countries covered

    44

    ESG risk metrics

    37

    ESG impact metrics

    Prime sovereign ESG ratings: built on in-depth analysis

    Our detailed paper explains how Prime sovereign ESG ratings highlight the ESG risks and opportunities across the sovereign fixed income universe.

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    Seeking to understand a country’s material ESG risks?

    Identify material ESG risks for, and inform engagement with, sovereign issuers.

    2

    Looking for a way to tailor portfolios to ESG preferences?

    Separate risk and impact models enable portfolios tailored to your preferences.

    3

    Need to report on the ESG risks and impact of your investments?

    Report against ESG requirements and the UN Sustainable Development Goals.
    Introduction to Prime sovereign ESG ratings

    In this video, Joshua Kendall, Head of Responsible Investment Research and Stewardship at Insight, introduces the Prime sovereign ESG risk and impact ratings.

    He explains how they support our analysts and portfolio managers in their investment decisions and engagements, and in building portfolios with specific ESG criteria.

    Prime sovereign ESG ratings FAQ

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    In this, our third-generation sovereign ESG framework, we have created two separate models: one that focuses on the risk of ESG factors to a sovereign’s creditworthiness, and an impact model that focuses on a country’s sustainable development performance.

    By splitting our sovereign ESG framework into two models we can better tailor portfolios to client preferences, allowing for a greater focus on credit risk or impact and sustainability if required.

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    In this, our third-generation sovereign ESG framework, we have created two separate models: one that focuses on the risk of ESG factors to a sovereign’s creditworthiness, and an impact model that focuses on a country’s sustainable development performance.

    By splitting our sovereign ESG framework into two models we can better tailor portfolios to client preferences, allowing for a greater focus on credit risk or impact and sustainability if required.

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    Isobel Lee, Head of global government portfolios
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