Fixed Income Investors Receive New Country Risk Ratings

    Stockholm (NordSIP) – On September 5, ESG research, ratings and analytics provider Sustainalytics announced the launch of Country Risk Ratings designed to help fixed income investors integrate ESG in their decision-making process.

    The new set of ratings, which combine ESG and economic indicators should provide fixed income investors with a forward-looking assessment of country risk for 170 countries. According to Sustainalytics, each assessment relies on 40 indicators, of which ten proprietary event indicators along with 30 indicators from globally recognized sources, including the World Bank and the United Nations. “Considering ESG performance, trends and current events, the new ratings measure the risk to a country’s long-term prosperity and economic development by assessing its assets – natural, human and institutional capital – and its ability to manage its assets sustainably,” reveals a press release.

    “Understanding whether countries are managing their assets sustainably can help investors to determine their exposure to risks associated with long-term prosperity and economic development,” said Vikram Puppala, Sustainalytics’ Director of Product Strategy and Development. “With Sustainalytics’ Country Risk Ratings, fixed income investors can supplement their credit ratings and integrate our ratings directly into their credit risk analysis to get a more holistic view of country risk.” According to research provided by the CFA institute, half of all fixed income investors currently integrate ESG considerations into their investment processes.

    To supplement the Country Risk Ratings, Sustainalytics provides a Country Screening Service, which allows investors to screen on countries that are subject to UN, US and EU sanctions as well as whether countries are signatories to international norms. This service covers 170 countries and 40 international norms and conventions.


    Image by stokpic from Pixabay

    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA is Editor-in-Chief for NordSIP and Managing Director for Big Green Tree Media. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.

    Latest Posts

    NordSIP Insights Handbook

    What else is new?