knowledge-base.md

World Bank Reports

• Incorporating Environmental, Social and Governance Factors Into Fixed Income Investment \ The result of a partnership between the World Bank Group and Government Pension Investment Fund (GPIF) of Japan: to collaborate on initiatives that promote strategies for including environmental, social and governance (ESG) criteria in investment decisions across asset classes.

• Governance Improvements and Sovereign Financing Costs in Developing Countries \ Using a novel methodology based onestimating sovereign credit ratings using the Moody's scorecard, and examining the associations between these ratings and the World Bank's Country Policy and Institutional Assessment (CPIA) scores, this paper examines how making improvements in the quality of economic policies andinstitutions can help lower governments' financing costs.

Other Reports & Publications

• The Role of ESG Factors in Sovereign Debt Investing (BlueBay)

• Sustainable Investing: A “Why Not” Moment (Blackrock)

• The Investor Revolution (HBR)

why_esg.md

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. While corporate disclosure of ESG criteria is becoming more mainstream, the World Bank has found ESG data at the sovereign level is lagging. Demand for better country level ESG data from trusted sources was one of the findings of an ongoing joint research program between WBG and Japan’s Government Pension Investment Fund (GPIF).

In order to shift financial flows so that they are better aligned with global goals, the World Bank Group (WBG) is working to provide financial markets with improved data and analytics that shed light on countries’ sustainability performance. Along with new information and tools, the World Bank will also develop research on the correlation between countries’ sustainability performance and the risk and return profiles of relevant investments.

This work is part of the newly launched 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.

The World Bank’s ESG Data Draft Framework provides information on 17 key sustainability themes spanning environmental, social, and governance categories:

Environment	Social	Governance
Emissions & pollution	Education & skills	Human rights
Natural capital endowment & management	Employment	Government effectiveness
Energy use & security	Demography	Stability & rule of law
Environment/climate risk & resilience	Poverty & inequality	Economic environment
Food security	Health & nutrition	Gender

                                   | Access to services     | Innovation

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The ESG Data Draft Framework incorporates data relevant to all 17 Sustainable Development Goals. The Framework organizes data into themes the World Bank believes are crucial for financial sector representatives to consider when assessing the contribution of investments or policies to sustainable development. The initial set of indicators has been based on:

• Survey of World Bank data currently used by investors
• Indicators relevant to World Bank's own policy analysis
• Other key indicators identified through analysis of World Bank expert teams
• Availability, coverage, timeliness of data