KEY TAKEAWAYS

• Climate change represents one of the largest policy challenges faced by sovereign states today, as the needs of the environment and society come into conflict with established economic paradigms.
• Sovereign investors can benefit from reliable and robust data to analyze the climate risks and the climate performance of their sovereign investments.
• In order to achieve an effective climate change mitigation and adaptation, investors also need to take social and governance aspects into account.
• At the end of the day it is not sufficient to simply take government-level policy pledges at face value. ISS ESG analysis allows sovereign investors to conduct granular analysis of a country’s underlying climate risks and opportunities, as well as the strength of the social and governance structures they have in place to enable change.