As part of their strategic response to climate change, investors are making commitments to reach net zero and to significantly reduce the greenhouse gas emissions associated with their investment portfolios, which includes sovereign debt. Currently, there is no universally coherent way to assess sovereign debt from a climate change perspective.
ASCOR (Assessing Sovereign Climate-related Opportunities and Risks) was designed to address this gap. As the first tool of its kind, ASCOR can help investors assess sovereign exposure to climate risk and engender greater transparency between issuers, financial institutions, and relevant stakeholders.
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The ASCOR tool identifies the most critical and publicly available climate data points to be used in sovereign debt financial analysis, thus reducing uncertainty around what information is needed.
ASCOR’s methodology and third-party assessments will be fully publicly available and, in understanding what investors wish to learn, issuers can then share relevant, climate change related information.
ASCOR will open communication channels and facilitate greater dialogue between private investors and sovereign bond issuers, enabling issuers to demonstrate their climate change progress more easily over time, attract additional investment, and build trust.
Through clarity, transparency, and dialogue, the ASCOR project has the potential to build investor confidence in governments’ climate change goals, which will encourage the redirecting of finance to build more resilient societies.
We have published the ASCOR Consultation Report, explaining the overall framework, and launch a public survey seeking to obtain feedback. In parallel, we will convene virtual and in-person regional roundtables to generate greater insights.
We will conduct assessments of an initial 25 countries and share respective results with sovereign issuer representatives for feedback.
We will publish the ASCOR Final Report and the pilot country assessments. In the following years, we will assess remaining sovereign debt issuing countries, launch, and integrate this data into the ASCOR tool, which will be regularly updated over time.
The Assessing Sovereign Climate-related Opportunities and Risks (ASCOR) Project is led by asset owners, asset managers and investor networks. ASCOR is co-chaired by Victoria Barron, BT Pension Scheme Management, and Adam Matthews, Church of England Pensions Board. ASCOR was established with the UN-convened Net-Zero Asset Owner Alliance (AOA), Ceres, the Institutional Investors Group on Climate Change (IIGCC), the Principles for Responsible Investment (PRI), and Sura Asset Management, who are all part of ASCOR’s Steering Committee. The project is supported by Chronos Sustainability.
ASCOR’s academic partner is the Transition Pathway Initiative (TPI) Global Climate Transition Centre, based at the Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science.
The ASCOR Advisory Committee, who are among the funders of the current stage of the project, is composed of the Steering Committee members and representatives from Aktia Bank, Allspring Global Investments, Amundi Asset Management, Colchester Global Investors, Franklin Templeton, MFS Investment Management, and Ninety One. Additional partners to the project include the investor networks Investor Group on Climate Change (IGCC) and Asia Investor Group on Climate Change (AIGCC).
