Sovereign debt

Traditionally considered to be a risk-free asset class, sovereign debt has been subject to less ESG consideration than other fixed income instruments. However, there is growing appreciation that a more explicit and systematic consideration of ESG factors can enhance risk assessments of government bonds and help drive change towards more sustainable growth models.

The resources below can facilitate the incorporation of ESG factors in sovereign debt analysis and inform engagement on ESG topics with sovereigns and other country stakeholders. The PRI would like to thank the advisory committee for its support. Contact us if you have questions.

Press Release

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The ASCOR Project: Assessing Sovereign Climate-related Opportunities and Risks

2021-05-14T07:30:00+01:00

Asset owners, BT Pension Scheme and the Church of England Pensions Board, alongside the UN-convened Net-Zero Asset Owner Alliance (AOA), the Coalition for Environmentally Responsible Economies (Ceres), the Institutional Investors Group on Climate Change (IIGCC), the Principles for Responsible Investment (PRI), the Transition Pathway Initiative (TPI) are, supported by Chronos ...

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Announcing the Advisory Group for the Assessing Sovereign Climate-related Opportunities and Risk (ASCOR) Project

2021-09-16T06:41:00+01:00

Aktia Bank, Amundi, Colchester Global Investors, Franklin Templeton, MFS Investment Management, Ninety One and Wells Fargo Asset Management join the ASCOR Project Advisory Committee representing over US $5 trillion SURA Asset Management, Latin America’s largest pension fund provider joins the ASCOR Project Steering Committee

Latest report & blog

ESGengagementSovDebt

ESG engagement for sovereign debt investors

How existing communication channels can be leveraged to stimulate conversations around ESG topics through a multi-pronged process, which can be mutually beneficial for sovereigns and investors (2020).

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It’s time for sovereign bondholders to be more vocal on ESG topics

Engagement on ESG issues is an underutilised practice among sovereign bondholders, and this needs to change. Bondholders can play an important role in driving change and shaping ESG outcomes through their investment decisions.

Practical guides

  • Sovereign-debt_image

    A practical guide to ESG integration in sovereign debt

    Designed to help signatories integrate ESG factors into research, analysis and the construction of sovereign debt portfolios, this guide includes lists of data sources, practitioner case studies and a comparison of ESG incorporation techniques (2019).

  • fixedincomeinvestor

    Integrating ESG factors into sovereign issuer analysis

    Based on discussions and presentations with the PRI fixed income sovereign working group, this report is a primer that provides an initial conceptual framework exploring ESG issues that might be material to sovereign bond risk assessments and pricing (2014).

  • sovbondspotlight

    Sovereign bonds: spotlight on ESG risks

    Drawing on information disclosed through the PRI’s reporting data and interviews to its signatories this document represents one of the first attempts to show how ESG factors can be material to the creditworthiness and investment performance of sovereign bonds (2013).