ESG and government bonds: It’s complicated

While few would question the importance of applying ESG considerations to government bond allocations, there’s a continuing philosophical debate about how best to do it. ESG integration in a global sovereign portfolio can present significant challenges—and come with several tradeoffs—so it’s perhaps not surprising that no consensus has been reached on the complex issue of how to approach it.  

For investors looking to integrate ESG in sovereign bond allocations, the ongoing debate over investment approach has meant there’s been a relative lack of ESG government bond indexes in the market. Drawing on the factor tilting we’re already using for our FTSE Global Factor Index Series, we’ve developed an index that addresses the challenges and tradeoffs associated applying ESG considerations to a sovereign debt portfolio.

You can now read the full blog post at the link below