Global Footprint Network announced an agreement with carbon footprinting provider South Pole Group to strengthen their respective offerings by collaborating on comprehensive climate and carbon impact assessment services for sovereign bond investors.
The announcement follows an increasing awareness among investors about the climate change impact of their assets, and their interest in reducing related investment risk. Growth assets, such as sovereign bonds, are among some of the most sensitive to climate risks, especially in emerging markets. With more than $40 trillion of sovereign debt in global markets at any given time, the imperative of understanding the effects of resource trends on nations’ economic health and creditworthiness has risen up the agenda. France is the first country to require institutional investors to disclose the carbon exposure of their portfolios, starting in 2016.
“Global Footprint Network has extensive experience in measuring ecological risks at the country level, specifically as it relates to their incorporation into sovereign bond investments and credit ratings,” says Dr. Maximilian Horster, Director Financial Industry at South Pole Group. “By leveraging South Pole Group’s experience in cross-asset climate impact assessments, we can together offer clients the possibility to pioneer the reporting of carbon in their sovereign bond portfolios. This partnership is also very much in line with South Pole Group’s constant expansion of climate impact assessments across all asset classes, already including corporate bonds, real estate, private equity, infrastructure as well as direct investments into forestry and agriculture assets.”
Working together, South Pole Group and Global Footprint Network aim to further their common objectives of supporting the wider disclosure of carbon exposure of investor portfolios and mobilising investors and policymakers to act to minimise climate change. Going forward, the two organisations will look to further develop and perfect their methodological approach to the carbon impact assessment of sovereign bonds.
“The tightening global competition for the planet’s resources is becoming an ever more significant factor of national economic performance, yet its influence is still underestimated by most country risk analysts,” says Susan Burns, Co-founder and CEO of Global Footprint Network. “We are convinced that environmental and resource risks are material to a nation’s ability to repay its debts and raise new revenues. Building on our strong credentials and data in natural resource accounting, we can, together with South Pole Group, ensure that investors can report on carbon in all asset classes, including sovereign bonds.”
About Global Footprint Network
Global Footprint Network, the leading expert in natural resource accounting, provides forward-looking risk data to fixed-income, banking, insurance and other finance professionals with exposure to country-level risk. With offices in the North America, Europe and Asia, the international think tank tracks countries’ resource deficits and assesses the risks that they create for national economies—risks that are currently underestimated in many country-risk models and sovereign credit ratings. In addition to its work with the finance industry, Global Footprint Network is the lead organizer of Earth Overshoot Day each year and provides a menu of tools to local and national governments to drive informed policy decisions in a resource-constrained world. For more information, visit www.footprintnetwork.org or follow Global Footprint Network @EndOvershoot.
About South Pole Group
The Zurich-based South Pole Group began as a project-driven company focused on developing and selling high-quality carbon credits. Today, it is the world’s leading provider of climate solutions. South Pole Group helps public and private sector organisations develop climate proven policies and strategies. Areas of expertise cover every key sustainability-related area of climate change, including but not limited to: forests & land use, water, sustainable cities & buildings, as well as renewable energy and energy efficiency. For more information, visit www.thesouthpolegroup.com or follow the company @southpolegroup.
Ronna Kelly, Communications Director, Global Footprint Network
+1 510 834 2563
Nadia Kahkonen, Communications Manager, South Pole Group
+66 2 678 8977