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The Mutual Influence of Investors and Government

On issues from voting rights to climate change, the relationship between investors, companies, and governments has never been more dynamic. This has spurred a lively discussion about the impact and appropriate role of these actors in addressing systemic environmental and social issues. An increasingly cited view is that commitments made by businesses and investors are often superficial, and at best, can provide only incremental progress towards addressing the problems we face. Some go further to suggest that sustainable investing has done more harm than good, with the notion that these efforts have provided a false sense of progress and have delayed meaningful government action. This is a worthwhile debate, but my experience over the last eight years in the sustainable investing space has given me a very different perspective.

indonesia

ESG Disclosure and Performance in Southeast Asia

Strategically located at the centre of Asia Pacific, with a young population of more than 675 million across 11 countries, Southeast Asia is an economic block with one of the world’s fastest GDP growth rate. In recent years, the region has been attracting the attention of global investors. At the same time, in the context of responsible investing moving from a niche activity to the mainstream, research on the environmental, social, and governance (ESG) performance of Southeast Asia companies is limited. In this article, we have a deeper look at the ESG disclosure and performance of major Southeast Asia countries, focusing on the ASEAN-6 countries (Singapore, Malaysia, Thailand, Vietnam, Indonesia, and the Philippines).

Rising Risks: The U.S. Gulf of Mexico blog

Deepwater Plays Against Rising Risks: The U.S. Gulf of Mexico

As onshore resources became harder to locate over the past decades, offshore exploration and production have grown into a global industrial activity. The prospect of finding hydrocarbons has led some companies to explore deeper waters in some regions.

Country Risk Ratings

Applications of Country Risk Ratings in Fixed Income Investing

How are Country Risk Ratings being utilized to identify risk and to construct a sovereign ESG fixed income index? Listen in as Manna Neghassi, Manager, Product Strategy and Development at Sustainalytics and Katie Binns, Senior Product Manager, Fixed Income Indexes at Morningstar Indexes tell us more.

10 for 2021

Sustainalytics' 10 for 2021 On-Demand Video

Listen in as the Sustainalytics 10 for 2021 research team walks you through the report, highlighting the key subindustries, from agrochemicals, agriculture and aquaculture to packaged food, food retail and restaurants,

10 for 2021 report

10 for 2021: Investing in the Circular Economy

This report aims to support investors interested in gauging environmental, social and governance (ESG) risks and opportunities in the global food value chain. We survey key subindustries – from agrochemicals, agriculture and aquaculture to packaged food, food retail and restaurants – in search of solutions that may support the principles of the circular economy (CE). These principles include minimizing waste and pollution, extending the use-phase of products and ecosystem regeneration. Some of the key insights found in the report are:

926 Engagement Meetings in Emerging Markets

Lessons Learned from 926 Engagement Meetings in Emerging Markets

When Sustainalytics (GES[1]) initiated the Emerging Markets (EM) Engagement program as a pilot project in 2009, the scale, scope and impact were undetermined factors. Based on the successful execution of the program methodology in the African and Middle Eastern regions during the pilot stage, the full program launched in 2010 to cover all major emerging markets. After the project close in July 2020, the program accounts for 926 meetings with companies in emerging markets.

ESG at a Reasonable Price in China

Over the last decade, portfolio managers worldwide have been increasingly convinced that incorporating environmental, social, and governance (ESG) criteria into investment decisions could provide better risk-adjusted returns. As a result, responsible investing, has moved from a niche activity to the mainstream. As more capital shifts to ESG products, there have been discussions regarding the risk of an ESG bubble as stocks with good ESG scores have enjoyed price appreciation and sometimes go beyond fundamentals[i].

Navigating ESG Issues in Australia

The past 15 years, responsible investing in Australia has evolved from a fringe practice to one of the top investment trends with responsible investing assets now on the cusp of AUD 1 trillion.

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COVID-19 in Country Risk Ratings

The COVID-19 pandemic is one of the biggest global economic and societal challenges of the last decades.

COVID-19 and ESG at a Reasonable Price in Australia

“We are living in extraordinary times” seems to be these days’ mantra. It certainly reflects well the dynamics of global share markets, including Australia’s, as shown in the chart below.

Coronavirus: Assessing the Effectiveness of Government Responses

Since the World Health Organization declared the COVID-19 outbreak a pandemic on March 11, global stock markets have seen losses not experienced since the 2008 financial crisis.

ESG Transparency Poland (English Report)

Since 2012, GES together with the Polish Association of Listed Companies, a self-government organization of companies listed on the Warsaw Stock Exchange, has been involved in an educational project ESG analysis of companies in Poland aimed at increasing disclosure and transparency of reporting on non-financial indicators.

Emerging Markets Equities: Key Sources of ESG Risk

Based on our analysis, we find that investors in the FTSE Emerging Index are exposed to over 14 percent more unmanaged ESG risk than those in the FTSE Developed Index. The ESG risk gap between these indices is largest on the issue of data privacy and security. In addition, investors in select equity markets, such as China, may face a trade-off between chasing higher economic growth and mitigating portfolio ESG risk.

New Frontiers: African Sovereign Debt and ESG Risk

In New Frontiers: African Sovereign Debt and ESG Risk, we leverage our Country Risk Ratings to analyze ESG risk among African countries. Our findings show country-level ESG risk and average sovereign credit ratings exhibit a strong positive correlation.

ESG Transparency Poland (Polish Report)

Since 2012, GES together with the Polish Association of Listed Companies, a self-government organization of companies listed on the Warsaw Stock Exchange, has been involved in an educational project ESG analysis of companies in Poland aimed at increasing disclosure and transparency of reporting on non-financial indicators.

South Africa and ESG Risk

A Case Study On November 1, 2019 Moody’s cut its rating outlook for South Africa from “Baa3 stable” to “Baa3 negative,” putting the country’s bonds on the cusp of junk status after several harbingers of a potential downgrade.[i] Earlier this year, the World Bank and the International Monetary Fund cut their 2019 growth forecasts for South Africa to around 0.8%, while the Institute of International Finance warned that the country’s public debt could grow to 95% of Gross Domestic Product (GDP) by 2024.[ii] The other two big credit rating agencies (CRAs) – Fitch and S&P – downgraded South Africa’s credit rating to sub-investment grade back in 2017, citing a deterioration in the country’s public finances.[iii]

Revising Mining Codes: Equality for Nations or Nationalization?

In recent years, an increasing number of nations, particularly in Africa, have been amending their mining codes. Governments likely view these amendments as a way of getting more for their people from their natural resources. But are these amendments slowly leading to the nationalization of the sector in some of these countries and how are the companies reacting?

The Impact of Country ESG Risks on Company Operations

In this article we explore how operating in Peru affects the world’s second largest mining producer of precious metals, Barrick Gold. Based on analysis from our recently launched Country Risk Ratings, we discuss how the challenges facing Barrick’s mining operations in Peru are strongly influenced by the country’s ESG risks.

Emerging market equities, ESG risk and sector tilts

The International Monetary Fund’s (IMF’s) recent downward revision to its projections of near-term global expansion reflects growing concerns about brewing market tensions. Central issues affecting capital markets include trade disputes between the US and China, Brexit and subdued investment and demand for consumer durables. According to the IMF’s latest outlook, global real GDP will grow 3.2% in 2019 and 3.5% in 2020 – a downgrade of 10 basis points (bps) for each year compared to the IMF’s previous outlook last April.[i]