Listen below via YouTube to a webinar hosted by Global Footprint Network and South Pole Group January 10 on our new report, Carbon Disclosure and Climate Risk in Sovereign Bonds.
The new report outlines a methodology for investors to disclose and manage carbon exposure in their sovereign bond holdings.
The recommendations in the paper were developed in collaboration with a working group of nine asset owners and managers brought together by Global Footprint Network and South Pole Group to address the lack of clarity on climate disclosure methodologies for sovereign bonds. The participating companies included Aegon Asset Management, Alliance Bernstein, BlackRock, BT Pension Scheme, DEGROOF Petercam, MN, Swisscanto Invest, Nippon Life Global Investors, and Vontobel.
The report reviews a variety of approaches, recommends a carbon intensity approach, and provides case examples. Going beyond simple sovereign bond portfolios, the report provides guidance on mixed asset class portfolios and an approach to company-wide reporting in multiple asset classes. The report also addresses additional dimensions including emissions in production, consumption and trade, and emissions from land use changes.
The report recommends a dashboard of indicators for the most comprehensive climate and carbon risk assessments, including indicators for transition risk, a country’s policy response, and physical climate change risk.