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The role of ESG factors in sovereign debt investing

Environmental, social and governance (ESG) investing in sovereigns is less developed than it is in equities and corporate debt. 

Our research suggests that taking ESG factors into account has the potential to open up new opportunities for alpha, particularly in an active management context.

In partnership with global risk analytics company Verisk Maplecroft we have produced the following research report that is aimed at supporting the development of sovereign ESG investing.

‘The role of ESG factors in sovereign debt investing’ introduces an innovative way of measuring sovereign ESG across 198 countries, using over 80 risk factors assessed by Verisk Maplecroft, that arguably differentiates and identifies investment-material momentum more effectively than traditional methods.

We have worked to comprehensively quantify the relationship between ESG and sovereign bond pricing in 97 developed, emerging and frontier markets between January 2013 and May 2018.

Want to read about the important results the research highlighted?