When investors thought about how climate change might affect their portfolios a decade ago, their attention was usually focused on the companies they were investing in. How big was a firm’s carbon footprint, for example, compared with its industry peers? Nowadays, people looking at climate risk are increasingly focused on a new problem: the assets issued by governments.

Numerous sovereign bond funds focused on environmental, social and corporate governance (ESG) have emerged in the past 18 months, launched by everyone from the giant BlackRock to smaller firms such as Legg Mason and Ninety One. FTSE Russell has a climate risk sovereign debt index. These services cater to growing demand for ways to filter out climate risk in sovereign bond portfolios, and even the European pensions and insurance regulator Eiopa is paying more attention to how climate change could present risks to government bonds...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now