Authors
Gautier Desme & Lauren Smart
Sovereign bonds, the issuance of debt by a country to finance its activities, is one of the largest asset classes in the world, with over USD 20 trillion of central government debt securities outstanding in 20162 and general government debt exceeding USD 62 trillion in 2016.3 As such, it is a key mode of financing for governments, is one of the largest asset allocations by pension funds, and should be a focus of examination for climate risk analysis.
In this fascinating paper, Trucost, outline a number of approaches to sovereign bond evaluation and the metrics available.