ESG Factors in Sovereign Bonds

We are frequently asked how we apply ESG factors to our investment in sovereign bonds, for example do we use ESG factors to weigh the relative merits of the environmental or social policies of the Swedish or Australian government?

Our brief answer (which, as is the nature of brief responses, says everything and nothing) is that we consider ESG factors to the extent that they affect the issuer’s ability and willingness to service their debts. In this paper we aim to provide a fuller example of how ESG factors influence investment decisions in sovereign bonds. We hope to demonstrate that ESG factors can influence the market pricing of bonds as well as a country’s economic fundamentals and its prospects for sustainable growth

Read the full report here