Bloomberg, One Planet SWF Paris, and the rise of ESG integration to country risk

As the poet said, nothing is more powerful than an idea whose time has come. And the two last weeks probably demonstrated that the time for ESG criteria integration into country rating might have come…

Last week, we attended the One Planet Sovereign Wealth Funds initiative reception, being held in Paris, at the Shangri-La hotel, and co-organized by Bloomberg. Since 2017, the SWFs have been working to accelerate efforts to integrate financial risks and opportunities related to climate change in the management of sovereign funds and large assets. Their moto: “Integrating Climate Change Risks and Investing in the Smooth Transition to a Low Emissions Economy“. Bloomberg, through GBF, the Bloomberg Global Business Forum, is also committed to improve social and economic wellbeing in the coming decades. During the dinner, were 200 people from different countries gathered, discussions focused on the climate change urgency, and the need to take action, with no further delay.

Nothing is more powerful than an idea whose time has come.

— Victor Hugo

The very same week, the day before the reception, Monday the 28th, Euler Hermes became the first credit insurer to add ESG criteria to country risk methodology, according to Ludovic Subran, Chief Economist at Allianz. Of course, we couldn’t agree more with this rising market trend, since, during the second semester of 2019, we had been researching this topic, and ended with our own proprietary methodology. Our ESG Impact Rating for countries was the thus the first product we developped, and released, last November. And, indeed, January the 19th, we published our own view on the subject: “Countries ESG impact rating: should it be integrated into credit rating?“.

Well… time is on our side, yes it is!

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