Below is an excerpt from ISS ESG’s recently released paper “Fighting Climate Change: A Battle of the Sovereigns”. The full paper is available for download from the Institutional Shareholder Services (ISS) online library.
KEY TAKEAWAYS
- Climate change represents one of the largest policy challenges faced by sovereign states today, as the needs of the environment and society come into conflict with established economic paradigms.
- Sovereign investors can benefit from reliable and robust data to analyze the climate risks and the climate performance of their sovereign investments.
- In order to achieve an effective climate change mitigation and adaptation, investors also need to take social and governance aspects into account.
- At the end of the day it is not sufficient to simply take government-level policy pledges at face value. ISS ESG analysis allows sovereign investors to conduct granular analysis of a country’s underlying climate risks and opportunities, as well as the strength of the social and governance structures they have in place to enable change.
Source: IEA data from IEA (2021) World Energy Balances, www.iea.org/statistics, All rights reserved; as modified by Institutional Shareholder Services Inc.
Explore ISS ESG solutions mentioned in this report:
- Extend your ESG policies to your fixed income portfolio with the ISS ESG Country Rating.
- Extend your ESG policies to your fixed income portfolio with the ISS ESG Country Rating and the ISS ESG Country Controversy Assessments.
By Janina Magdanz, Country Rating Analyst, ISS ESG. Punkhuri Kumar, Country Rating Analyst, ISS ESG.
