Where do we go from here?

So how can investors use their important role to support global sustainability objectives, as well as better protect their portfolios from multiplying swans?

These risks and impacts can be addressed directly and the exposure to them managed better by directing investment flows towards countries that want to play a positive role in the international community, uphold democratic norms and human rights, and deal with the climate crisis. Our framework is designed to help identify such countries, and this report will take you through its key topical themes outlined below.

We constantly enhance our framework to ensure that our conclusions accurately reflect the global economy’s ever-changing complexities and risks. The resulting changes and enhancements, the latest of which are described below, also mean that the resulting country scores do not present a basis for like-for-like comparisons with our previous reports.

• Emissions – we introduced our new emissions model, examining carbon footprint by industry and energy source, assessing the potential for Net Zero

• Food production and security – weaponisation of grain exports has added to pressures on our food supply chains, already strained by COVID restrictions, population growth, changing diets, and environmental impacts. Ahead of schedule, we added a new subcomponent to reflect food production and supply, self-sufficiency, and ultimately food security.

• Democratic accountability – with the world’s autocracies and populist movements gaining ground and indulging in isolationism and deglobalisation, common solutions, dialogue, and cooperation seem hardest to achieve when they are most needed to cope with the climate emergency

• Energy Transition – energy security has risen to the top of the agenda of European governments, and the transition to independent and renewable energy sources should be the centrepiece of economic policies for the next decade. We enhanced our Sectoral Energy Consumption sub-component to better reflect the latest development.

Download the full paper: 

2022_11_sovereign_report_en_web.pdf (candriam.com)