ESG Sovereign Factor-IN

Adjusted Financial Ratings of Sovereign bonds to ESG factors.

ESG process

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  • How ESG performance is linked to GDP growth for 213 countries?
  • What is the impact of ESG factors on sovereign creditworthiness?

Innovative ESG factors integration methodology for countries

5 steps approach to transform ESG factors into advanced financial metrics

Our ISR analysts have selected 295 ESG factors that are susceptble of creating an impact on the economic performance of countries.

Environment Social Governance
E01. Climate Change S01. Demographics – Life conditions G01. Democratic Life
E02. Energy Efficiency S02. Demographics – Dynamic G02. Political Stability
E03. Energy Security S03. Economic Inequality G03. Corruption
E04. Energy Infrastructures S04. Gender Inequality G04. Political Effectiveness
E05. Pollution S05. Employment G05. Security
E06. Biodiversity S06. Labor & Social Protection G06. Financial Stability
E07. Resource & Depletion S07. Education G07. Rent Dependency
E08. Water Scarcity S08. Innovation & Human Capital G08. Business rights
E09. Water Infrastructures S09. Health Issues G09. Economic Attractiveness
E10. Land Resources S10. Health Infrastructure G10. Economic Openness
E11. Agriculture & Food S11. Vulnerability G11. Economic Investment
E12. Transport Infrastructures S12. Lifestyle Risks G12. Industrial Strength
Financial, social, health or energy needs of a child differ from those of an adult or an elderly. So it goes for Nations along their development pathway. Carbon emission of least develop countries are very low compared to those of high income countries. Reversely health infrastructure, financial inclusion or legislative frameworks tend to prove more developed among richer countries. Interestingly, financial rating methodologies often take into account such difference in the structure of key performance factors among emerging and developing countries.

Hence, ESG factors’ impact on national economies performance differ depending on their level oconomic devement. Beyond Ratings ESG Factor-In approach identifies the most relevant E, S, G factors with regards to growth correlation for five groups of countries:

  • Low-Income economies (GNI per capita <1025$)
  • Lower-middle-income economies (1025$< GNI per capita<4035$)
  • Upper-middle income economies (4035$< GNI per capita<12475$)
  • High income economies OECD (GNI per capita>12475$)
  • High income economies non-OECD (GNI per capita>12475$)


A statistical PCA approach allows to discriminate E, S and G factors in regards to their relative impact on countries GDP. The intensity of the impact is reflected in the weighting of these indicators.


An average score is calculated for each E, S, G indicator within each countries cluster. Then each country is positionned vs. its pairs as regards its E, S ang G performance scores. We therefore determine if the country over/under-perform against its pairs depending on its revenue / capita. Finally we recalculte the adjusted GDP / capita of the country.

this adjusted GDP /capita is calculated yearly.


The adusted GDP factoring E, S, G performance is re-injected into our quantitative sovereign risk scoring. The sovereign risk scoring is recaulcuted with the new data, to provide an ajusted sovereign risk score. By comparing the reference score and the ESG adjutes score, we identify how E, S, G indicators impact the quality of sovereign debt.


Key Features

Adjusted Sovereign Ratings

Factor ESG Criteria

Measure the impact of ESG factors on Ratings

Assess the financial materiality of ESG factors on countries GDP and Sovereign Ratings.

Factor ESG indicators

Normalized methodology to measure the financial materiality of ESG factors

Advanced insights on countries risks

ESG factors can significantly modify the perception of analysts on the drivers of economic growth and solvency risk.

Advanced Analytics

Determine which ESG factors matter. And which don’t.

Focus on ESG factors that matter

Too many ESG factors blur the capacity of analysts to identify those that really matter. This is why ESG Sovereign Monitor makes sense.

SRI mastered

High end expertise delivered in a simple yet operational tool

Joint project with Grizzly RI

Benefit from best-of-breed ESG research with our partner Grizzly RI.

  • Most relevant ESG factors with regards to economic performance for 213 countries, depending on their development pathway: OECD, Europe, US, Asia, Emerginc Countries
  • E,S and G Adjusted GDP metrics per country and associated time series
  • Early warning of ESG under/over performance with regard to GDP
  • ESG SWOT per countries
  • Quantitative sensitivity analysis of Sovereigns’ solvency to ESG performance
  • Access to our ESG database
  • Access to a powerful data-visualisation interface to analyse, compare and share ESG performance assessments per country

Key Benefits

Leverage ESG factors to implement an augmented investment strategy for your sovereign assets.

  • Focusing immediately on the most significant E, S, G indicators uncovered for each country
  • Monitoring performance discrepancies between E, S, G and GDP, as harbingers of upcoming market corrections
  • Translating E, S, G performance into economic and financial metrics for a larger integration in your investment strategy, from SRI to Mainstream portfolios.

Why assess the ESG performance of Countries?

Sovereign are the key stakeholders to channel economies towards sustainable development pathways. They negotiate international treaties (peace, labour, trade, environment). They set national laws and fiscal framework.

Education, Health, Demographics, Governance, Equality, Rule of Law, Quality of the Environment… ESG factors do have a significant impact on economic performance and Sovereign solvency.

Yet, ESG integration in Sovereign assets management remain limited, whereas Sovereigns account for 45% of outstanding global bond issues and stand for a major share of long term savings (Pension Funds and Insurance Company).

Why Beyond Ratings?

  • Beyond Ratings is specialized in macro-economic analysis and sovereign / country risk assessment
  • This innovative methodology was developed thanks to the contribution of several expertises, from data science to ISR analysis
  • This service is co-developed with Grizzly Responsible Investment, an expert in extra-financial analysis

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OPP_VERT_1C_7462BLUE_petitBeyond Ratings is a member of 1% for the Planet. 1% of the profits from this product will be donated to nonprofits creating positive environmental impacts.