Insight Investment launches country rating model

funds-management/Insight-Investment/ESG/ESG-investments/sustainability/sustainable-investments/political-uncertainty/GDP/best-performer/

12 November 2018
| By Oksana Patron |
image
image
expand image

Insight Investment has launched a country rating model to explore how environmental, social and governance (ESG) factors affect sovereign debt portfolios.

The model would link sustainability and individual country risk against a backdrop of rising political and economic uncertainty.

According to Insight Investment’s senior ESG analyst, Joshua Kendall, the model’s findings showed that most countries’ ESG performance deteriorated and the governance was on a downward trend across more than half of developed market countries.

“Sovereign debt investors need more information to make informed decisions about the extent to which ESG factors are reflected in market prices,” Kendall said.

“We developed this model in response to client interest and expect to refine it over time as the quality and quantity of third-party research and data grows.”

Initial insights included:

  • Countries with higher GDP per capita typically had better ESG scores.
  • More countries were deteriorating on ESG than improving – with the majority of developed markets receiving a negative ESG momentum score. 
  • ESG momentum had a weak relationship overall with standard industry measures of sovereign credit risk.
  • New Zealand was the best performer thanks to its robust institutions and governance, stable social relations with a broad acknowledgement of human rights based on the rule of law, and limited exposure to environmental risks. 
  • Afghanistan was the worst performer due to many years of conflict which resulted in a politically and socially unstable system, with little data is available on environmental factors.
Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 4 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

3 weeks 5 days ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 4 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 3 days ago

TOP PERFORMING FUNDS