In the past 10 years, social and sustainable bond markets have been among the most innovative success stories of the financial sector in its efforts to participate in the transition to a sustainable economy.
Among the lessons learnt over those years is the necessary alignment or consistency between the issuance and the issuer’s global commitment to sustainability. Investors are then increasingly looking at how—beyond the issuance and the use of proceeds of a thematic bond—a debt issuer is managing sustainability in the present and planning for the future. In other words, this refers to the ESG profile/ESG rating or ESG assessment of the issuer.
I Care co-authored a study that tries to shed light on the nascent universe of the ESG assessments for debt portfolios, focusing on public entities and Sovereigns of the LAC region. This study supports the Inter-American Development Bank’s (IDB) major efforts on educating its beneficiaries on ESG topics, alongside its role of promoting better ESG practices among issuers, namely by addressing the following questions:
- What is an ESG profile or an ESG performance assessment for a public issuer?
- What are investors focusing on when assessing a public issuer sustainability profile?
- Which tools and services are available, and what are their limitations?
- What are some key considerations for public issuers who decide to participate, understand, and potentially improve their ESG profile?
The report showcases current practices and data considerations regarding ESG assessments in the bonds market. This expert opinion summarizes some of its key findings and I Care views on the topic, with particular attention to the LAC market’s specificities and success cases.
This expert opinion, written in February 2022, is part of a series of publications called “Yes We Care About” that is published by I Care, and which can be found in the Insights section.
Click on the available file below to read the Insight.