Sustainalytics Launches Country Risk Ratings for Fixed Income Investors
Addition of ESG dimension to traditional credit factors offers investors a comprehensive view into the risks facing a country’s long-term prosperity and economic development
Toronto, September 5, 2019 – Sustainalytics, a global leader in ESG research, ratings and analytics, today announced the launch of its Country Risk Ratings, which combine ESG and economic indicators to provide fixed income investors with a forward-looking assessment of country risk. Nearly half of all fixed income investors now integrate ESG considerations into their investment decision-making processes, according to research by CFA Institute. With fixed income investors seeking ESG insights to better manage investment risks and meet client demands, Sustainalytics’ Country Risk Ratings help investors to identify and assess the ESG risks facing countries and how these risks might impact their credit analysis.
Sustainalytics’ Country Risk Ratings, covering 170 countries, are based on more than 40 indicators, over ten proprietary event indicators from Sustainalytics 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.
Sustainalytics’ methodology captures a country’s wealth through an ESG lens – a view which may not be explicitly captured in sovereign credit ratings. The Country Risk Ratings from Sustainalytics enable investors to assess the creditworthiness of a country on a deeper level versus only measuring macroeconomic factors such as income and production. Leveraging Sustainalytics’ Country Risk Ratings, fixed income investors can perform more in-depth sovereign credit risk analysis, portfolio analysis and macroeconomic analysis.
“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.”
Sustainalytics also offers investors 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.
To learn more about Sustainalytics’ Country Risk Ratings and Country Screening Service, please visit here.