A growing body of research demonstrating the materiality of ESG criteria indicates that investors need to manage and assess ESG risks and opportunities associated with their investments – for all asset classes. Better ESG data can also help channel financial flows to more sustainable activities that are better aligned with the Sustainable Development Goals.
The World Bank Group (WBG) has been collaborating with investors and other market participants to provide financial markets with improved sovereign ESG data and analytics that increase transparency around countries’ sustainability performance. This Sovereign ESG Data Portal is part of the work supported by the Global Program on Sustainability (GPS), which aims to provide governments and investors with information and tools that improve their understanding of sustainability criteria, including through natural capital accounting. Providing improved ESG data to the financial sector is a key component of the Incentives pillar of GPS, which is led by the Finance, Competitiveness, and Innovation (FCI) Global Practice in collaboration with the World Bank Treasury, Country Credit Risk Group and other groups.
The Sovereign ESG Data Framework incorporates data relevant to all 17 Sustainable Development Goals. The Framework organizes data into themes the World Bank considers to be crucial for financial sector representatives to consider when assessing the contribution of investments or policies to sustainable development. The data set will evolve over time. The initial set of indicators has been based on:
This category encompasses key themes, which provide a picture of the sustainability of a country’s economic performance given its natural resource endowment, management and supplementation and its risk or resilience to climate change and other natural hazards. This category pays particular attention to the internalization of environmental externalities created by economic activity. This category also accounts for sustainable energy access and food security, crucial factors for stable long-term economic growth.
This category encompasses key themes, which provide a picture of the sustainability of a country’s economic performance given its efficacy meeting the basic needs of its population and reducing poverty, management of social and equity issues and investment in human capital and productivity. This category also includes demographic criteria, pertinent to stable long-term economic growth.
This category encompasses key themes, which provide a picture of the sustainability of a country’s economic performance given its institutional capacity to support long-term stability, growth and poverty reduction. This category also accounts for the strength of a country’s political, financial and legal systems and capacity to address environmental and social risks.