• Gustavo Bernal Torres

Sovereign ESG Credit, Politics, China's Transition, and Satellites


Source: Pixabay


Here are 5 ESG insights you might have missed this week:


1. Geospatial ESG-

  • A report on the emerging application of geospatial data for gaining ‘environmental’ insights on the asset, corporate and sovereign level.

  • Starting with the current data landscape, the document runs through the open ‘environmental’ geospatial data portfolio, outlining its strengths and weaknesses. From this vantage point, the report outlines three case studies in Brazil across differing scales, highlighting various key metrics.

  • The document demonstrates that it is possible, even with limited resources and only open data, to generate robust geospatial ESG insights that often can be scaled globally – aiding financial institutions to better differentiate environmental impact at different scales and across different applications.

  • Link to Source: https://www.wwf.org.uk/sites/default/files/2022-01/Geospatial_ESG_Report.pdf


2. West Virginia Treasury Drops BlackRock Over Stance on Climate Risk-


3. Seizing Business Opportunities in China’s Transition Towards a Nature-positive Economy-

  • China has an opportunity to achieve its economic and social ambitions and the vision of ecological civilization, while creating millions of sustainable jobs.

  • This report takes a close look at China, the world’s second-largest economy and one of the most biodiverse countries in the world. Four decades of rapid economic growth and urbanization have unfortunately come at a cost to the health of natural ecosystems.

  • Businesses have a key role to play in a carbon-neutral and nature-positive future. Our study shows that 15 priority transitions have the potential to add $1.9 trillion in annual business value and create 88 million jobs by 2030 in China.

  • Link to Source: https://www3.weforum.org/docs/WEF_New_Nature_Economy_Report_China_2022.pdf


4. Assessing Climate Change Risks To Canada's Financial System-

  • The Bank of Canada and the Office of the Superintendent of Financial Institutions (OSFI) completed their climate scenario analysis pilot in collaboration with six Canadian federally regulated financial institutions.

  • The pilot has fully met its goals of (i) building the capability of authorities and participating financial institutions to do climate transition scenario analysis, (ii) supporting the Canadian financial sector in improving its assessment and disclosure of climate-related risks and (iii) contributing to the understanding of the potential exposure of the financial sector to climate transition risk.

  • In line with the objectives of the pilot, the Bank has developed a set of global climate transition scenarios to capture a range of risk outcomes that could be stressful to the Canadian economy and the financial system.

  • Link to Source: https://www.bankofcanada.ca/2022/01/assessing-climate-change-risks-to-our-financial-system/


5. Credit Worthy: ESG Factors and Sovereign Credit Ratings-

  • A new report from the World Bank looks at how and which ESG factors apply to sovereign fixed-income assets; and the role of credit rating agencies in assessing materiality.

  • Our analysis to date highlights the “unique” nature of the sovereign debt asset class from an ESG perspective, largely driven by the complex nature of a sovereign nation, in particular compared to a corporate entity.

  • This paper focuses on sovereign credit ratings and empirically assesses how broad sovereign ESG factors—as well as the ESG factors specific to a country’s national wealth and management of risks and opportunities related to so-called stranded assets like fossil fuel resources—are manifested in sovereign credit rating assessments.

  • Link to Source: https://documents1.worldbank.org/curated/en/812471642603970256/pdf/Credit-Worthy-ESG-Factors-and-Sovereign-Credit-Ratings.pdf




One more thing: If you want to explore more on the use of satellite data, have a look at Leafmap. A Python package for geospatial analysis and interactive mapping.


Find the link here: https://leafmap.org/



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A new report from the World Bank looks at how and which ESG factors apply to sovereign fixed-income assets; and the role of credit rating agencies in assessing materiality. Our analysis to date highli