Publication:
Incorporating Environmental, Social and Governance Factors into Fixed Income Investment

Loading...
Thumbnail Image
Files in English
English PDF (1.9 MB)
12,599 downloads
Published
2018-04
ISSN
Date
2018-04-19
Editor(s)
Abstract
This research report is the result of a partnership between the World Bank Group (WBG) and Government Pension Investment Fund (GPIF) of Japan, initiated by the World Bank Group's President, Jim Yong Kim, and GPIF's Chief Investment Officer, Hiro Mizuno. The aim is for the World Bank and IFC – member of the World Bank Group focused on the private sector – and GPIF to collaborate on initiatives that promote strategies for including environmental, social and governance (ESG) criteria in investment decisions across asset classes. Ultimately, the goal is to direct more capital towards sustainable investments and leverage the private sector to achieve the scale of investment needed to meet the Sustainable Development Goals.
Link to Data Set
Citation
Inderst, Georg; Stewart, Fiona. 2018. Incorporating Environmental, Social and Governance Factors into Fixed Income Investment. © World Bank. http://hdl.handle.net/10986/29693 License: CC BY-NC-ND 3.0 IGO.
Digital Object Identifier
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections

Related items

Showing items related by metadata.

  • Publication
    Institutional Investment in Infrastructure in Developing Countries : Introduction to Potential Models
    (World Bank, Washington, DC, 2014-02) Inderst, Georg; Stewart, Fiona
    The link between infrastructure and economic growth is widely acknowledged -- as is the infrastructure gap, which can act as a break on growth in emerging markets and developing economies (EMDEs). Since the global economic and financial crisis, the challenges of raising financing for infrastructure projects in EMDEs are also well known. The challenges come from stretched government finances and restrictions on global bank lending. Hence much attention has been focused on the potential for institutional investors as a growing potential source of financing. This paper argues that infrastructure projects can potentially deliver long-term returns, but investments, particularly in EMDEs need to be carefully structured to meet the needs of both sides. The paper first considers the existing types of institutional investors and their potential for filling the infrastructure financing gap. The challenges of adjusting asset allocations, particularly toward EMDE infrastructure, are discussed and examples of projects where institutional investors have been involved are given. Finally, the paper considers a range of models for the involvement of institutional investors in EMDEs and makes initial proposals for how to determine which model fits best in a particular country context.
  • Publication
    Proving Incentives for Long-Term Investment by Pension Funds : The Use of Outcome-based Benchmarks
    (World Bank, Washington, DC, 2014-05) Stewart, Fiona
    A fundamental goal of any pension system is to ensure that members receive an adequate income when they retire. Although traditional defined benefit pension plans set out how pension income will be determined in advance and then strive to deliver this, the growing number of defined contribution plans accumulate a sum of assets which can then be turned into a pension income on retirement. However, the amount of this retirement income is not predefined This frequently leads to a focus by not only most pension providers, but also regulators and pension plan members themselves on the short-term accumulation of pension assets rather than the longer-term goal of securing an adequate retirement income. This paper discusses a possible solution to this challenge: the use of benchmarks to encourage pension funds to invest with the longer-term goal of delivering adequate retirement income in mind. Examples are provided of leading pension funds that already work with long-term, outcome-based benchmarks. The paper suggests a methodology for pension regulators to use in order to incentivize pension funds in their jurisdictions to adopt a similar approach.
  • Publication
    MIGA Annual Report 2013 : Insuring Investments, Ensuring Opportunities
    (Washington, DC: World Bank Group, 2013-10-11) Multilateral Investment Guarantee Agency
    In fiscal year 2013, Multilateral Investment Guarantee Agency (MIGA) issued 2.8 billion dollars in investment guarantees for projects in our developing member countries. At 1.5 billion dollars, representing more than half of new business, the bulk of MIGA's guarantees issued support investments in Sub-Saharan Africa. Sixty-nine percent of new business volume this year was in complex projects in infrastructure and extractive industries, a strategic priority for the Agency. This year, 82 percent of MIGA's new volume fell into one or more of strategic priority areas: investments in the world's poorest countries, "South-South" investments, investments in conflict-affected countries, and investments in complex projects. MIGA also established the conflict-affected and fragile economies facility to further deepen support to this priority area.
  • Publication
    Environmental, Social, and Governance Investing
    (World Bank, Washington, DC, 2021-03-01) Bouye, Eric; Klingebiel, Daniela; Ruiz, Marco
    This primer responds to central banks’ growing demand for knowledge on social, governance, and environmental considerations (ESG) in the investment process. This area has gained traction in the last two decades. More recently, central banks’ interest in ESG has increased, but much of the information available is aimed at investors with different investment objectives and broadly diversified portfolios. The authors fill that information gap by reviewing the definitions of ESG and the main ESG investment approaches, including their applicability to asset classes. The authors then examine how foreign reserve managers can apply ESG investing in their reserve management operations. The authors find limited scope for implementing ESG strategies in reserve management, given that most central banks still invest primarily in sovereign bonds of major economies. Yet, the authors also identify opportunities and critical considerations for central banks interested in implementing ESG investing in their reserve management operations.
  • Publication
    Greening the Wind : Environmental and Social Considerations for Wind Power Development
    (World Bank, 2011-12-01) Ledec, George C.; Rapp, Kennan W.; Aiello, Roberto G.
    This report identifies good practices for managing the key environmental and social issues associated with wind power development and provides advice on how best to address these issues in project planning, construction, and operation and maintenance. It provides detailed background information on wind power, with special focus on two emerging themes of growing scientific and public interest: namely the biodiversity-related impacts and the broader socioeconomic and cultural dimensions of wind power development. Like wind power itself, the scope of this report is worldwide although special attention is paid to the issues characteristic of the Latin America and Caribbean (LAC) region. While the principal focus is on land-based wind power, it also briefly addresses the environmental and social impacts related to off shore wind development. Wind power today is widely regarded as a key component of an environmentally sustainable, low-carbon energy future because it is renewable, requires almost no water, and generates near-zero emissions of greenhouse gases and other pollutants. In many parts of the world, wind power has the potential to significantly reduce greenhouse gas (GHG) emissions from electric power generation, thereby helping to limit the severe environmental and social consequences of human-induced climate change. The growth of wind power has also occurred due to its other positive attributes, including growing economic competitiveness. The adverse biodiversity-related impacts of wind power facilities mainly involve birds, bats, and natural habitats.

Users also downloaded

Showing related downloaded files

  • Publication
    Strategic Environmental Assessment for Industry Sector Himachal Pradesh, India
    (Washington, DC, 2013-12-23) World Bank
    This strategic environmental assessment (SEA) is a technical piece intended to assist in the current and future identification of priority industrial pollutants and economic instruments to minimize industrial waste. This industrial sector SEA is one of six pieces of technical support envisioned by the Himachal Pradesh (HP) inclusive green growth (IGG) development policy loan (DPL) to fill knowledge gaps and strengthen operational success of the DPL. The DPL acknowledges that industrial development is an important economic driver within HP, and that such development must be consistent with maintaining the integrity of other natural resource assets on which human health depend. The general objectives of the SEA study are: (i) to assist in identification of priority pollutants and industries; (ii) to review existing institutional structures that address these pollutants; (iii) to identify and recommend potential reform options through the introduction of new policy approaches; and (iv) to identify complementary institutional support necessary to implement such a program. The SEA was undertaken from April to December 2013 based on secondary data collection, existing literature, various consultative meetings with key stakeholders, and diagnostic analyses of this information. The purpose of the consultations was to discuss the findings, issues, and preliminary directions suggested by the desk reviews, and to initiate a work plan for amassing additional information. The SEA has included participatory approaches to ensure that presented policy changes are designed and implemented in a way that is responsive to the different segments of HP society. This report is presented in three parts. Part one forms a foundation for focusing subsequent diagnostic work by providing more extensive detail on the institutional context, pollution situation, health and environmental linkages, and opportunities for using economic instruments. Part two performs additional diagnostic analyses to inform the core recommendations relating to options for new economic instruments, institutional reforms, and capacity building; these recommendations are presented in part three.
  • Publication
    A Glass Half Full
    (Washington, DC: World Bank, 2018-09-19) Kathuria, Sanjay
    Trade has played a critical role in global poverty reduction. In harnessing the potential of trade, some of the most successful countries have developed strong trade relationships with their neighbors. However, many South Asian countries have trade regimes that often offset the positive impact of geography and proximity. This report documents systematically the gaps between current and potential trade in South Asia and addresses important specific barriers that have held trade back. These barriers include tariffs and paratariffs, real and perceived nontariff barriers, connectivity costs, and the broader trust deficit. This policy-focused report unpacks these critical barriers to effective trade integration in South Asia through four in-depth studies that produce new, detailed, on-the-ground knowledge. Three of the studies are based on extensive stakeholder consultations. Two also rely on tailored surveys. The fourth study, on tariffs, benefits from new data on paratariffs. The report also marshals new evidence showing how trading regimes in South Asia discriminate against each other. Given the South Asian context, incremental, yet concrete steps aimed at tapping the potential of deeper integration are appropriate. The report has been drafted in this spirit. It offers precise, actionable policy recommendations that could help achieve measurable progress in key areas of trade and integration that would be to the advantage of all countries in the region.
  • Publication
    World Development Report 2012
    (World Bank, 2012) World Bank
    The main message of this year's World development report: gender equality and development is that these patterns of progress and persistence in gender equality matter, both for development outcomes and policy making. They matter because gender equality is a core development objective in its own right. But greater gender equality is also smart economics, enhancing productivity and improving other development outcomes, including prospects for the next generation and for the quality of societal policies and institutions. Economic development is not enough to shrink all gender disparities-corrective policies that focus on persisting gender gaps are essential. This report points to four priority areas for policy going forward. First, reducing gender gaps in human capital-specifically those that address female mortality and education. Second, closing gender gaps in access to economic opportunities, earnings, and productivity. Third, shrinking gender differences in voice and agency within society. Fourth, limiting the reproduction of gender inequality across generations. These are all areas where higher incomes by themselves do little to reduce gender gaps, but focused policies can have a real impact. Gender equality is at the heart of development. It's the right development objective, and it's smart economic policy. The World development report 2012 can help both countries and international partners think through and integrate a focus on gender equality into development policy making and programming.
  • Publication
    Digital Africa
    (Washington, DC: World Bank, 2023-03-13) Begazo, Tania; Dutz, Mark Andrew; Blimpo, Moussa
    All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.
  • Publication
    The Double Burden of Malnutrition
    (World Bank, Washington, DC, 2012-11) Shrimpton, Roger; Rokx, Claudia
    The Double Burden of Malnutrition (DBM) is the coexistence of both under nutrition and over nutrition in the same population across the life course. 'Across the life course' refers to the phenomenon that under nutrition early in life contributes to an increased propensity for over nutrition in adulthood. The DBM affects all countries, rich and poor, and is a particular concern in countries with high stunting rates. The consequences of the DBM are enormous; early life under nutrition is an underlying cause associated with about a third of young child deaths. Among the survivors who become stunted during the first two years of life, their capacity to resist disease, to carry out physical work, to study and progress in school, are all impaired across the life course. Later in the life course, diet and nutrition, and especially obesity, are important underlying causes of many Non-Communicable Diseases (NCDs), including hypertension, diabetes, cancer, stroke, and ischemic heart disease. The causes of the DBM are related to a series of changes occurring in the world called the nutrition transition, the demographic transition, and the epidemiological transition of countries. The variables associated with the nutrition transition and obesity epidemic can be grouped into four cross-cutting themes, which include: (i) the health/biological environment; (ii) the economic/food environment; (iii) the physical/built environment; and (iv) the socio/cultural environment. The solutions for the DBM problems are reasonably well recognized in each of its parts: under nutrition and over nutrition. However, the solutions have not been combined into an overarching policy and program framework, which together with raising awareness about the serious future implications for the low-and middle income countries is the aim of this paper.