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Understanding ESG Impact Ratings for Sovereign Ratings
Understanding ESG Impact Ratings for Sovereign Ratings

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With increasing awareness about the sustainability of long-term investments and, besides corporate securities supporting the decision making, that a country is doing well in terms of its sustainability performance, there emerged an impetus for ESG Impact Ratings in Sovereign Ratings.

What are ESG Impact Ratings for Sovereigns?

ESG Impact Ratings for Sovereigns is meant to indicate how a country is performing in respect of ESG: environmental, social, and governance criteria. That rating will give an investor insight into the sustainability practice of a country and the ability that a country can carry out its obligation toward citizens and the world at large.

Why Is This Rating Important?

Such ratings help investors decide whether to put funds into sovereign bonds or similar securities issued by governments. ESG aids them in assessing the risks and opportunities available by such investment in that country.
 

How are sovereigns rated?

The methodology provides a critical analysis of the institutional framework of a country, governance practices, and impacts there from on the environment and society. Ratings are provided on a scale ranging from A+ to D-, with A+ being the highest performance in sustainability and D- as the lowest performance.

Key Advantages of Sovereign Ratings

In-depth analysis involves the examination of hundreds of factors and variables such as press freedom, UN sanctions, and EU embargos for a complete perception of a country’s ESG performance.

Investor Insights: it gives investors an overall view of a country’s practices in sustainability and hence enables them to make wiser investment decisions.

Global Coverage: Covers 195 sovereigns across the globe, providing a global perspective on sustainability performance. Conclusion: E&G Impact Ratings in sovereign ratings can serve as an anchor for investors wanting to factor sustainability-related considerations into their investment approach, reflecting the detail that the country’s ESG performance will give its investors in identifying better risks and investible opportunities to more sustainable and responsible ways.


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Inrate, a Sustainability Data and ESG Ratings company, helps financial institutions view sustainable finance from an “impact” lens. The contemporary responsible investor needs data that supports a variety of use cases and stands up to scrutiny. Inrate scales the highest quality and standards and deep granularity to a universe of 10,000 issuers, allowing portfolio/fund managers, research, and structured product teams to make confident decisions.

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