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Financial Services ESG Solutions

Sovereign ESG Data

Forward-looking, qualitative information as quantitative data at the sovereign level

As investor and regulatory pressure increases, financial institutions and their advisors need to be able to develop ESG risk and exposure assessments across all assets from public equities, debt, FX, infrastructure, property, derivatives, and increasingly, private companies.

The ability for financial institutions and corporations to measure, model & subsequently manage such ESG-related risks and opportunities at a country and territory level has been limited. However, building on our strong foundation and expertise in sovereign and country risk scoring, we have developed a robust methodology to score Sovereign ESG. With our Sovereign ESG data that provides a 10-year time series dataset of country and territory-level indicators, users are now enabled to compare the domestic structural and risk challenges that can impact the valuation of country and territory-level instruments, as well as the valuation of companies whose supply chains, physical operations and revenues are geographically dispersed.

  • 211 Countries and Territories
  • 41 Country and Territory-level ESG Indicators
  • Quantitative Output
  • 12-Months Forward-Looking Assessment for Key Indicators
  • 10 Year+ Time Series
211

Countries and Territories

41

Country and Territory-Level Indicators

12

Months Forward-Looking Assessment

10+

Years Time Series

What's Included

Sovereign ESG Data

Getting a credible strategic country and territory-level view of ESG exposure and how this is likely to change provides our clients with an opportunity to engage pro-actively with critical areas of risk and enable effective mitigation.  Across 211 countries and territories worldwide, our country and territory-level indicators over 10 years allow users to directly and indirectly:

  • Measure & model Sovereign ESG related risks
  • Identify Company level exposures to Country and Territory-level ESG
  • Benchmark securities & portfolios
  • Develop risk control and hedging strategies
  • Inform Index and structured product design  
  • Identify potential trading signals
  • Help meet client & regulatory reporting obligations

The 41 discrete indicators encompass the full spectrum of risks encountered by operators focused on the country and territory-level Environmental, Social,and Governance components of ESG. The metrics represent our forecast for these risks over the coming 12 months. 

Why a Country and Territory-level Approach to ESG Risk Matters

Environmental, social, and governance risks are normally considered at the corporate level. A Sovereign level context for ESG is critical for two reasons:

  1. The countries and territories a company operates to have a direct impact on a company’s exposure to ESG concerns. Risks are evolving in step with populations, activists, and government’s awareness and engagement with these issues.  Credibly evaluating the impact of specific projects on the environment, economy, and social fabric in the host country, territory, and community requires a deep understanding of existing and evolving dynamics.

  2. Second, ESG risks are no longer just the purview of global equities – these risks are becoming directly relevant to sovereign-level investing.  Understanding the issues and dynamics shaping political decision-making, societal pressures and activism helps position not just ESG risks as they manifest today, but also to spot emerging risk in new geographies and sectors.
Sovereign ESG Metrics Defined

Sovereign ESG numeration from IHS Markit reflects qualitative analysis and forecasts. IHS Markit’s expert team of macroeconomists and country/territory risk analysts score risks based on their own expert understanding of a country or territory’s political, economic, social, regulatory, and security environment. They draw on in-house macroeconomic forecasting models, information and data from open sources, and structured intelligence gathered by a network of thousands of in-country and territory personnel. Daily written assessments highlight a country or territory’s changing conditions and inform the risk scores. In addition to in-house expertise and models, analysis draws on experts in the field and in-country and territory sources with proven records of reliability. Our wide network of external analysts and contacts gives us access to local, specific, and granular information.

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