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ESG
Country
Credit
Ratings

ESG Credit Rating & Sovereign Bonds

ESG-adjusted country ratings better reflect investor risks & opportunities

Sovereign risk ratings –commonly referred to as credit rating – determines the level of interest a country has to pay for loans and credits. It is therefore a very important parameter for every economy – it defines the level of capital cost for new investments, whatever the nature of those investment may be. Credit ratings also affect direct investment decisions.

Sovereign risk ratings are calculated by a number of rating agencies, most notable (and defining) by the “three sisters”: Moody’s S&P, and Fitch. The publications and ratings of these three companies therefore have a significant impact on the cost of capital of a specific country.

Conventional credit ratings are calculated based on a mix of economic, political and financial risks – mainly current risks. However, current risks – like GDP – do not do not reflect the framework that creates the current situation. Current rating methodologies fail to integrate the wider environment – the ability and motivation of the workforce, the health and well-being of the population, the physical environment (natural and man-made) that have caused the current situation. It is therefore questionable whether credit ratings truly reflect investor risks of investing in a specific country.

For a detailed analysis, download the ESG Sovereign Bond Report.

 

ESG credit ratings vs. conventional ratings

To compare currently used sovereign bond ratings, an ESG-adjusted credit rating has been computed based on the Global Sustainable Competitiveness Index (GSCI). The GSCI covers all themes insufficiently integrated in conventional credit ratings. The comparision between ESG and current ratings shows significant differences: the Middle East, the USA, but also China and Indi all would be downgraded while a number of lesser developed nations in South America, Eastern Europe and Central Africa would receive better credit rating. For more detailed information, download the ESG Sovereign Bond Report.
 
ESG Ratings vs currently used country credit ratings:

RED       Current rating > ESG rating
BLUE      ESG rating = current rating
GREEN   ESG rating > current rating
 
ESG Country vs Conventional Ratings

 

ESG Sovereign Bond Rating by Country

CountryCurrent Credit Rating
Average Moody's, S&P, Fitch
GSCI ESG RatingESG vs. Current RatingESG-Adjusted RatingESG-Adjusted vs. Current Rating
AlbaniaB+BBB+6BB+3
AndorraBBB+BBB-1BBB-1
AngolaCCC+B+3B2
ArgentinaCCCBBB+10BB−5
ArmeniaB+BBB5BB+3
ArubaBBB−CCC−-9B-5
AustraliaAAABBB+-7AA−-3
AustriaAA+AA−-2AA-1
AzerbaijanBB+B+-3BB−-2
BahamasBB−B−-3B-2
BahrainB+CCC+-3B−-2
BangladeshBB−BB1BB1
BarbadosCCC+B2B−1
BelarusBBBB+7BB3
BelgiumAA−A-2A+-1
BelizeCCC−BBB10B+5
BeninB+B−-2B-1
BoliviaBBBB+7BB+4
Bosnia and HerzegovinaBBBB7BB4
BotswanaA−BB-5BBB−-3
BrazilBBBBB+5BBB−3
BulgariaBBBBBB+1BBB+1
Burkina FasoBBB−2B+1
CambodiaBBB3BB−2
CameroonBBBB−5BB3
CanadaAAAA−-6AA−-3
Cape VerdeB−B−0B−0
ChileAA−-1A0
ChinaA+A−-2A-1
ColombiaBBB−BBB+2BBB1
CongoCCC+BB−4B2
Costa RicaBA9BBB−5
CroatiaBBB−A+5A−3
CubaCCBB+9B5
CyprusBBB−BBB2BBB−1
Czech RepublicAA−A-2A+-1
DenmarkAAAAA-2AA+-1
Dominican RepublicBB−BBB−3BB+2
EcuadorCCC+BBB+10BB−5
EgyptBB+1B+1
El SalvadorB−BBB−7BB−4
EstoniaAA−A+-1A+-1
EthiopiaCCCBB6B3
FijiB+BBB5BB+3
FinlandAA+AA+0AA+0
FranceAAAA−-1AA0
GabonB−BB5B+3
GeorgiaBBBBB+4BBB−2
GermanyAAAAA−-3AA+-1
GhanaBBBB7BB4
GreeceBBBBB+4BBB−2
GuatemalaBBB-3BB−-1
HondurasB+B-1B+0
Hong KongAABBB-6A-3
HungaryBBBA−2BBB+1
IcelandAAA3AA−2
IndiaBBB−B+-4BB-2
IndonesiaBBBBBB0BBB0
IraqB−CC-4CCC-2
IrelandA+AA−2A+1
Isle of ManAA−BBB-5A-2
IsraelA+BBB-4A−-2
ItalyBBBA−2BBB+1
Ivory CoastBB−BBB−3BB+2
JamaicaB+BB−1B+0
JapanA+A+0A+0
JordanB+B+0B+0
KazakhstanBBBBBB−-1BBB0
KenyaBBBB−5BB3
KuwaitAA−B-11BBB−-6
KyrgyzstanBBBB6BB3
LaosCCC+BB+7B+4
LatviaAA0A0
LebanonDCCC4CC2
LesothoBB−-1B0
LiechtensteinAAAA+-4AA-2
LithuaniaAA0A0
MacedoniaBB+BBB2BBB−1
MalaysiaA−BBB-2BBB+-1
MaldivesB−BBB−7BB−4
MaliCCC+B−1B−1
MaltaA+A−-2A-1
MauritiusBBBBBB+1BBB+1
MexicoBBBBBB−-1BBB0
MoldovaB−BBB−6BB−3
MongoliaBBB−2B+1
MontenegroB+BBB6BB3
MoroccoBB+BB+0BB+0
MozambiqueCCC+CCC+0CCC+0
NamibiaBBBB+2BB1
NetherlandsAAAA-5AA-2
New ZealandAA+A+-3AA-1
NicaraguaB−BB4B+2
NigerB−B+2B1
NigeriaBB0B0
NorwayAAAAA-2AA+-1
OmanBB−BB−0BB−0
PakistanB−CCC+-1B−0
PanamaBBBBBB+1BBB0
Papua New GuineaBBB−2B+1
ParaguayBB+BBB+3BBB−1
PeruBBB+BBB+0BBB+0
PhilippinesBBBBB-3BBB−-1
PolandAA−-1A−-1
PortugalBBBA+4A−2
Puerto RicoDBB+11B−6
QatarAA−B−-12BBB−-6
Republic of the CongoCCC+B2B−1
RomaniaBBB−A−3BBB+2
RussiaBBBBBB+2BBB1
RwandaB+B-1B-1
San MarinoBB+A−4BBB2
Saudi ArabiaA+BB−-8BBB-4
SenegalBB−BB2BB−1
SerbiaBB+BBB+3BBB−1
SeychellesB+BB−1BB−1
SingaporeAAABBB+-7AA−-3
SlovakiaAA0A0
SloveniaAA1A1
Solomon IslandsCCC+BBB8BB−4
South AfricaBBB-3B+-2
South KoreaAAA-3A+-2
SpainA−A1A1
Sri LankaCCC+BBB8BB−4
St Vincent and the GrenadinesB−BB−3B+2
SurinameCCC−BBB−9B+5
SwazilandB−BB−3B+2
SwedenAAAAA+-1AAA0
SwitzerlandAAAAA-2AA+-1
TajikistanB−BB+5BB−3
TanzaniaBBB−2B+1
ThailandBBB+BBB−-2BBB-1
TogoBB1B1
Trinidad and TobagoBBB−-4B+-2
TunisiaB−BB−4B2
TurkeyB+BBB−4BB2
UgandaBB−-1B0
UkraineBBBB6BB3
United Arab EmiratesAABB+-8A−-4
United KingdomAA−A+-1AA−0
USAAAAA−-6AA−-3
UruguayBBBA−2BBB+1
UzbekistanBB−BBB−4BB2
VenezuelaDBBB13B7
VietnamBBBB0BB0
ZambiaCCB−4CCC2

Sustainabilty-adjusted credit ratings of selected countries

For a detailed analysis, download the ESG Sovereign Bond Report. Read more on the Global Sustainable Competitiveness Index

ESG Ratings vs. Conventional Ratings:

ESG Country Credit Rating

Download the Analysis: 
ESG Sovereign Bonds


Sustainable Competitiveness vs. the WEF-Competitiveness Calssification:

Download the Anaysis: Sustainable Competitiveness Vs. WEF Competitiveness

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