Country Risk Ratings

Measure the risk to a country’s long-term prosperity and economic development to supplement credit analysis

Overview

With the Country Risk Ratings, fixed income investors gain ESG insights not explicitly captured in sovereign bond ratings and traditional credit analysis.

The Country Risk Ratings measure the risk to a country’s long-term prosperity and economic development by assessing how sustainably it is managing its wealth. 

    Key Benefits
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Sovereign analysis

Supplement credit risk analysis by focusing on a country’s wealth and management of wealth through an ESG lens, which may not be explicitly captured in credit ratings

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Portfolio analysis

Combine data from Sustainalytics’ ESG Risk Ratings on corporate bonds and Country Risk Ratings on sovereign bonds for risk assessment of fixed income portfolios

Asset 10

Macro-economic analysis

Combine ESG, wealth, and economic indicators for a more holistic assessment of country risk

Asset 3

Early warning signal

Country events analysis provides an early warning signal and can help investors manage emerging risks

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Screening

Include best-in-class countries and combine with Country Screening to identify countries subject to UN, US, EU sanctions, and signatories to international norms

    How it works

1. Sustainalytics utilizes wealth data provided by the World Bank and groups a country’s assets (or National Wealth) into three categories:

Natural & Produced Capital
e.g. infrastructure, energy independence and natural resources

Human Capital
e.g. access to water and sanitation, mean years of schooling and life expectancy

Institutional Capital
e.g. rule of law, corruption and political liberties

2. A country’s ability to utilize and manage its wealth in an effective and sustainable manner is determined by:

ESG Performance

ESG Trends

ESG Events (e.g. civil conflicts, natural disasters)

By incorporating more than 30 indicators across the two steps, the Country Risk Ratings provide a comprehensive rating for each country, allowing you to compare countries’ wealth through an ESG lens

DELIVERY

Data Services
Image depicting data services offering for ESG ratings

Access our  research through an internal or a third-party system of your choice Bloomberg, Factset and Markit

RELATED SOLUTIONS

Identify and understand companies’ involvement in countries and territories where there is a high risk of human rights violations

Identify countries subject to UN, US and EU sanctions, and signatories to international norms

Identify companies involved in controversial weapons

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