Publication: Riding the Wave: Navigating the ESG Landscape for Sovereign Debt Managers
Date
2020-10-22
ISSN
Published
2020-10-22
Author(s)
Boitreaud, Sebastien
Gratcheva, Ekaterina M.
Gurhy, Bryan
Paladines, Cindy
Skarnulis, Andrius
Abstract
The world is on an unsustainable path.
Financial sector participants are becoming more conscious of
the impact of their economic, social and environmental
footprint. As the investor community makes progress towards
integrating environment, social and governance (ESG) factors
into investment mandates, particularly for equities and
corporate debt, integrating these factors into the sovereign
debt asset class has lagged- although investment practices
and approaches are evolving. As the financial ecosystem
changes, the Debt Management Office (DMO), as the main
financing arm of the state, would benefit greatly from
understanding how these changes affect the core Public Debt
Management (PDM) mandate and how to respond to the growing
investor demand for sustainable finance. The paper presents
an overview of areas in which DMOs can respond to the
changing world and proposes six ESG market readiness factors
as well as a framework to help formulate DMO strategy in the
area of ESG investing. The paper also concludes that in less
developed markets, given weak institutional arrangements, it
is often better to concentrate development efforts on the
local capital market as this will ultimately support a more
sustainable economy in the long run.
Citation
“Boitreaud, Sebastien; Gratcheva, Ekaterina M.; Gurhy, Bryan; Paladines, Cindy; Skarnulis, Andrius. 2020. Riding the Wave; Riding the Wave : Navigating the ESG Landscape for Sovereign Debt Managers. Equitable Growth, Finance and Institutions Insight;. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/34673 License: CC BY 3.0 IGO.”