Publication: Credit Worthy: ESG Factors and Sovereign Credit Ratings
Date
2022-01
ISSN
Published
2022-01
Author(s)
Gratcheva, Ekaterina M.
Gurhy, Bryan
Skarnulis, Andrius
Stewart, Fiona E.
Wang, Dieter
Abstract
The increasing role of the financial
sector in the move toward a more sustainable economic model
continues apace. The Coronavirus (COVID-19) shock shone a
light on the need for all society to correct course, and the
financial sector is responding. The pace of environmental,
social, and governance (ESG) integration into investment
decisions, which has become the prevalent form of
sustainable finance, continues to accelerate. These
developments reflect changing societal perspectives that
challenge the traditionally ingrained investment approaches
that have evolved over many decades. Against this backdrop,
various financial sector stakeholders continue to evaluate
how their role, products, and tools should adapt to this
evolving landscape. 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.
Citation
“Gratcheva, Ekaterina M.; Gurhy, Bryan; Skarnulis, Andrius; Stewart, Fiona E.; Wang, Dieter. 2022. Credit Worthy : ESG Factors and Sovereign Credit Ratings. Equitable Growth, Finance and Institutions Insight;. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/36866 License: CC BY 3.0 IGO.”