Environmental risk in EM Debt: introducing a new framework

Investors urgently need a framework to clearly assess environmental sustainability and risk on a country-by-country basis. Developed by WWF and Ninety One, the Climate and Nature Sovereign Index aims to tackle this need. It marks an important first step towards harnessing the potential of sovereign debt investing to help our planet’s transition towards sustainability.

22 Jul 2020

20 minutes

WWF and Ninety One introduce the Climate and Nature Sovereign Index – an important first step towards harnessing the potential of sovereign debt investing to help our planet’s transition towards sustainability.

The fast view

  • The natural world — the foundation of every nation’s development and continued growth — is in steep decline, creating systemic risks for economies globally.
  • How a country manages natural assets is significant for its future sustainability and growth prospects; sovereign debt investors need a clear assessment of this and associated risks.
  • To this end, WWF and Ninety One have developed a Climate and Nature Sovereign Index (CNSI).
  • The CNSI incorporates real-time data and forward-looking projections; thanks to ongoing work in geospatial modelling and remote sensing these are now obtainable.
  • The CNSI is not only a measure of risk; it should also help identify the opportunities to allocate capital to where it is most needed. But to achieve this, it must be complemented with new financing mechanisms.

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