Until now carbon disclosure has focused mostly on listed equities and to a lesser extent corporate bonds. Yet sovereign bonds represent one of the largest asset classes and a significant percentage of diversified investment portfolios, especially among institutional investors.
The lack of clarity on methodological approaches has been a major obstacle for assessing climate risk in sovereign bonds, though research contributions in the area are on the rise. In January 2017, Global Footprint Network together with South Pole Group outlined a methodology for investors to disclose and manage carbon exposure in their sovereign bond holdings. Their recommendations were developed in collaboration with a working group of nine asset owners and managers including Aegon Asset Management, Alliance Bernstein, BlackRock, BT Pension Scheme, Degroof Petercam, MN, Swisscanto Invest, Nippon Life Global Investors, and Vontobel.
Join the PRI, Global Footprint Network, MN, and Degroof Petercam for a comprehensive exploration of climate strategies for sovereign bond investors – including the use of a dashboard of indicators to identify and manage carbon transition and climate risks.