ETHO - ESG Credit Risk And Ratings: A Case Study
This material was originally published by the UN Principles for Responsible Investment ((PRI)) on 31 January 2019.
ESG criteria are an integral part of PIMCO's sovereign ratings analysis and provide important context to our assessment of a sovereign's creditworthiness. We believe incorporating ESG factors into traditional sovereign analysis helps the identification of credits with potentially lower long-term credit/higher default risk, as well as countries with positive and/or negative ratings momentum. Both are material to the evaluation of sovereign default risk in the medium term and the price of sovereign credit risk in the near term.