Sovereign Risk Monitor Methodology: How To Assess Sovereign Risk Including ESG Issues?

Julien Moussavi & Rayane Hanifi

Research Organisation
FTSE Russell

Report Date
May 5, 2021

Document summary

Environmental, Social and Governance (ESG) is increasingly taken into consideration by financial and institutional players, yet it is still not integrated systematically in sovereign risk analysis. Recent efforts, like the United Nations’ UN-PRI initiative, or the BIS’ Green Swan reports, have taken up the issue to highlight the importance of the ESG and Sustainability viewpoint.

This paper lays out a methodology that integrates holistically, and objectively, ESG performance and traditional economic and financial metrics in the sovereign risk analysis.

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