Although the use of sustainability metrics in sovereign fixed income markets is becoming more mainstream, there is a lack of consensus on how to appropriately assess countries’ environmental, social and governance performance.
Using a simple statistical framework and our proprietary Sovereign Risk Monitor (SRM) methodology, we estimate a log-linear relationship between the income level of economies and their respective E, S and G performance assessment.
Read this paper to learn why:
- The income bias is most pronounced for G scores, but is weaker for S and particularly E scores.
- The existing dichotomy between high-income (OECD and non-OECD) economies is amplified after adjusting for the income bias;
- Low-income economies score higher after taking into account the income bias, in each of the E, S or G pillars.
Read the full whitepaper now at the link below