Sovereign Debt Investing: ESG Framework and Applications

AXA Investment Managers: Until a few years ago, it was rare for investors to consider environment, social and governance (ESG) factors for asset classes beyond traditional equity and corporate fixed income. Today, investors increasingly express interest in ESG analysis that can be applied to asset classes such as sovereign debt. This interest has only been amplifi ed by the euro zone crisis, which has brought the evaluation of sovereign issuers’ credit worthiness to the fore. In this research, AXA Investment Managers present two ways that investors may incorporate ESG factors into a sovereign debt portfolio using a new country ESG analysis framework.