Assessing Sovereign Climate-related Opportunities and Risks (ASCOR) is an investor-led project to develop a free, publicly available, independent tool that assesses countries on climate change. Following the release of the ASCOR tool in December 2023, this webinar launched the tool and showcased research insights and market participant reflections.
During this webinar, speakers introduced the collaborative project, presented the methodology and shared findings from the first assessment of 25 countries. Asset managers and sovereign issuers also discussed how the new ASCOR tool will benefit their analysis and decisions.
Speakers:
• Victoria Barron, ASCOR co-chair, Head of Sustainable Investment, Brightwell Pensions
• Antonina Scheer, Research Project Manager, TPI Centre, LSE
• Johannes Honneth, Analyst, TPI Centre, LSE
• Claudia Gollmeier, Managing Director Singapore & Senior Investment Officer, Colchester Global Investors
• Esther Law, Senior Investment Manager EM Debt & Responsible Investing Lead, Amundi Asset Management
• Alexandra Beust, Head of Investor Relations & Green Finance, German Finance Agency
• Herman Kamil, Head of Debt Management Office, Uruguay Ministry of Economy and Finance
• Adam Matthews, ASCOR co-chair, Chief Responsible Investment Officer, Church of England Pensions Board
Good afternoon everybody and welcome to this afternoon’s webinar my name is Victoria I’m co-chair of ascore and also the head of sustainment investment at Brightwell pensions um we’re going to be recording today’s meeting and fingers crossed it works and if it does this meeting will be going up on to the TPI
Website um so please head there if you miss anything um but also head there for further information and also ww. as.org for any of other of your asore needs so today we’re going to be going through the tool and its findings but I think what’s particularly special about
Today’s meeting is that we’re not only going to be joined by Leading sovereign debt investors but also the German Finance Agency and the Uruguay Ministry of economy and Finance Agency I think so many of these conversations often happen on the asset manager and asset owner side rarely with the other side of the
Table sharing their views and experiences so I really want to say thanks to Alexandra and her man for being here today so after my piece we’re going to be hearing from two colleagues from the TPI Center Antony nir who’s a research project manager and a driving force behind this project and Johannes honth
Who is one of the analysts also equally a driving force they’re going to be walking through the framework and the country assessments it’s going to be very interesting then we’re going to be hearing from Claudia GM who is managing director of Singapore for cultures to Global Investors where she manages
Global and emerging Bond portfolios joining her will be law who’s senior investment manager at aundi where she is also a an Emerging Markets debt and responsible investing lead they’re going to be talking about how they plan to use ascort as fund managers as I mentioned we’re delighted
To be uh joined by Alexandra Bo head of investor relations uh and green Finance of the German Finance Agency and Herman camil head of debt management office from the Uruguay Ministry of Finance and uh economy they’re both hugely influential in this space and they’re going to share the opinions on asol
Finally we’ll have time for Q&A with my co-chair Adam Matthews who is head of responsible investment at the church of England pensions board and he will be chairing that section so please store up all of your many questions which we hope there will be for then next slide
Please fantastic so as Co another acronym but this one’s quite different it stands for assessing Sovereign climate related opportunity unities and risks and it’s investor Le project to many of those investors that have contributed significantly to this project can be found in that blue box on
The right hand side and I think what’s exciting about this project is that it’s really been done to uh assess uh the progress that Sovereign issuers are making on uh climate change the impact of climate change on their countries now because it’s an investor Le um it was this whole tool was created
To inform investment decisions on sovereign bonds um and with explicit focus on climate change so not a high level ESG rating but actually something much more specific on climate change and this work has undergone substantive and significant consultation and input not only from investors but also from
Sovereign issuers and this is I think what’s really key to making this tool special as I said if you want to find out about the methodology and the results head to the TPI website or uh ascal project.org next one please so what’s so special about ascore there’s other stuff that’s out there
Well this is really tailored to investor needs um and it really brings a unique value to assessment of financial systems it’s comprehensive the framework is really covering a a really large topic um of different factors that are important to how countries are managing climate change and then how investors
Can consume that is financially relevant I’ve already as I’ve already said because investors want to understand this information because they want it to integrate it into their investment making decisions and finally we think it’s going to be really useful for engagement because it can also help inform investors dialogue with Sovereign
Issuers but also help those issuers with a way to communicate what they’re doing and their progress next slide please now we’ve been working on this for quite some time uh since 2021 and we’ve gone through several iterations and phases and right now we are in the
Final Phase on on the right hand side so we’ve done our assessment of 25 countries that’s what’s going to be discussed today but the plan is now to expand that analysis to 70 countries and in 2025 out to 100 countries so we’re really not keep keeping this focus on
Just one set of countries we are going global next slide please right I’m now handing over to antonina who’s going to go through all the detail please pay attention she’s going to make some really excellent points and handing over to antonina thank you thank you so much Victoria so
My name is antonina Shar I’m a research project manager here at the TPI Center based at the London School of Economics um everything that I’ll be presenting here will be fairly brief it’s just an overview of the framework as a bit of a refresher um but you can find much more
Detail if you look for the ascore methodology note which is available on the website that Victoria mentioned at the beginning ascore project.org to start we thought it would be useful to lay out the design principles that have guided the development of the ascore framework over the past two years
So the first six principles here were with us from the very beginning and the seventh design principle was added as a result of feedback we received from the public consultation held last year so firstly all assessments um under the ascore framework use exclusively publicly available information this is
To create a tool that drives transparency and disclosure second the framework is built as binary yes or no questions or indicators as well as quantitative metrics to sort of provide a bit more detail on uh particular indicators that uh that are just binary third the methodology and the
Assessments and the sourcing we use are all transparent fourth the way that the framework was built um was done in such a way that we avoid any unnecessary additions to the reporting burden of sovereigns fifth the focus is at the national level this is to align with um
The investor asked from the very beginning to provide an assessment of sovereign Bond issuers sixth we have an important principle here which is the principle of common but differentiated responsibilities and respective capabilities this is often summarized as the fairness principle it’s something that’s enshrined in the UN framework
Convention on climate change as well as in the Paris agreement and I have the next slide to go into a little bit more detail on EX exactly how we put this principle into practice the seventh design principle we have as I mentioned um was added based on the consultation
Period And this is that everything we have and everything we show within the ascore results focuses on how countries are performing on the management of climate risks and opportunities and this is to focus on where governments have agency and this is very much to enable
Ask or to be used for engagement and to enable countries to improve their performance over time so just delving a little bit uh more into this principle of common but differentiated responsibilities um I’ll start by mentioning that what this means in a nutshell is that although all
Countries need to take part in climate action um this should be differentiated and sort of contextualized by both historical emissions and responsibility for causing climate change but also um the different levels of development that countries have and how that affects their ability and capability to um invest in climate solution
So the way that ascore puts this into practice is through income group exemptions we categorize the countries that we assess using the World Bank income groups and we assess High income countries against the highest standard against all indicators that are relevant to them um middle-income countries because we must recognize their
Development priorities but they also have an important role to play in the transition are assessed on all areas but are exempt from the highest ambition indicators finally low-income countries are generally very minor contributors to Global emissions and as a result they’re fully exempt from three specific areas
Within the framework that Focus um on mitigation policy one last thing to note here about this fairness principle is that the asore results that we provide are not aggregated into a single country score and this is really to ensure that the output that we provide um gives a really
Nuanced and meaningful picture of how sovereigns are managing climate risks and opportunities rather than aggregating all of the different types of practices that they may be doing into one result um the reason this fits in with the fairness question is that if there is any income bias um a single
Country score uh creates a risk of capital flight from Emerging Markets before we go into the results um which my colleague will be presenting um we thought it would be useful to just get a high high Lev bird’s eye view of the framework um and you’ll be able to
See the specific indicators that feed into each of these areas in a moment so with the bird’s eye view we have three pillars a first pillar that looks at emissions Pathways both historical Trends and forward-looking targets we have a pillar that looks at climate policies which cover policies towards mitigation adaptation and just
Transition and finally we have a pillar that covers the broad theme of climate Finance from a few different perspectives one thing we thought would be useful um during this webinar is to map onto these different areas something that may be uh more familiar and intuitive to some investors particularly
Those that use the Net Zero investment framework that was developed by the ICC so these are not exactly word for word mappings but it may help to interpret what each of the areas of the escore framework is measuring so the first area that we have is emissions Trends this
Really gets at the question of emissions performance and climate performance so how are emissions decreasing over time is there really um uh progress towards targets and are the policies that are in place effective at actually lowering emissions complementing this backward-looking analysis we have an assessment of forward-looking targets
And this tells investors about the level of ambition that different countries have in a very comparable way the biggest um sort of theme that we have amongst the whole ascore framework is looking at this question of implementation you can also think about this in the words of the corporate
Perspective when you when you do corporate assessments of climate um which is the decarbonization strategy so all of these different areas tell investors a little bit more in detail how our country is going to implement their targets and their adaptation Ambitions finally we have these two areas within pillar three that look at
The transparency of how countries are costing how much their um their um targets their transition plans and also their adaptation plans um will cost and also um being transparent about public expenditures and what’s being um spent on climate action very briefly this is just to outline a little bit more um the
Structure that we have of the ascore framework so as you just saw we have three pillars Each of which has a number of areas and within each area there are either a group of indicators and sometimes also some metrics or sometimes only metrics um and the as I mentioned
We don’t provide a country level score but we do provide area level results that sort of the maximum level of aggregation that’s provided through the ascore tool and how this is done is if all of the indicators within an area are yes then that area is assessed as yes if
There’s a mix then it’s partial and if um all of the indicators within the area or assessed as no then that area result is no this is to help you interpret the results that we’ll come to in a moment very quickly just to give um a
Bit of a visualization this is how the first pillar assessments um look if you were to plot them out on a Time series so you can see the country’s historical emissions you can see their targeted pathway based on their ndc’s set for 2030 and we compare these 2030 targets
To both a national 1.5 degree Benchmark which is based on least cost modeling of um of uh a 1.5 scenario um and we also provide a fair share Benchmark which allocates the 2030 carbon budget to different countries based both on their historical emissions and their income per capita and this very concretely puts
Into practice that principle I was mentioning before of common but differentiated responsibilities the last thing I’ll say before handing over to the results is um that we have here uh just a screenshot of what the ascore tool looks like so this is if you follow the link uh that
Victoria mentioned at the beginning um there’s a button at the top that says access the asore tool and if you click there you’ll be brought here uh this is hosted by the transition pathway initiative website um and you can find at the very top of this page um the sort
Of green button that says download ascore data this enables any users of the ascore tool to see everything that we publish um all of the results of the indicators of the areas of the metrics and also the sources um then you can scroll down and these bubbles here are
All the different countries we assess on each area and you can click on a given country to see their country web page you can also use the drop- down menu to find country and the last thing to mention here is this uh little button at the top uh called methodology that will
Bring you to the methodology note where you can find a lot more detail about all of this so without further Ado I’m happy to hand over to Johannes yes thank you antonina I will quickly guide you through the results of our first assessment cycle but before so
I wanted to introduce you quickly also to the scope of our initial assessment on the next slide um if we could through slides perfect so in the initial assessment round we covered 25 countries and we think we assessed quite a good mix of income groups of different climate risks
Physical and transitional but also policymaking systems and geographies in the next iteration this year we plan to cover 70 countries but right now we already have included 70% of global Global venous gas emissions and around 50 to 80% of the main Sovereign bond market indcs um I will sometimes refer to Country
Specific um to specific countries but otherwise keep it rather General um the data is already out there and if you’re interested in specific country cases go and and visit a tool on the TPI Center’s web page um and now on the next slide you find an overview of our areas and
The share of countries being assessed as yes no and partial on on each of them and overall we observe that the overwhelming majority of country and area results are artial um this this can be explained by the design based on the structure of asor but it also shows that
That most countries have at least started the climate journey in a serious way strong areas can be found when looking at the areas that tend to be rather procedural or or actions that concentrate on setting up a foundation for climate action but do not necessarily reduce emissions without
Further steps um as for example Target setting making a framewor law but also disclosing budget spending on climate weak areas then on the other hand can be found when we look at areas that that really centralize taking actions by implementing specific sectoral policies or undertaking real Investments um but
We can see that at ending fossil fuel subsidies practical sectoral regulations but also the financing towards the global South um but I will Deep dive now into these areas over the next 13 slides and this kind of slide you will now see for quite some time um it presents the
Title in in um on the upper left of the area and then you will find some area level observations underneath and on the right side we present bar charts for every indicator showing the percentage of countries assessed as yes um I will sometimes refer to these bar charts but
To not exceed the scope of this webinar focus on overarching remarks so we assessed emission trends of countries to give investors an idea about the performance of countries and their actual emission reductions and how they relate to 1.5 degrees um we observed that over the last five years
Half of the countries we assessed have achieved emission reductions on a range of metrics we assess consumption emissions production emissions um look Solly at L use emissions we look at Absolute emissions but also include GDP intensities and per capita intensities in the end none of these emission reductions are steep enough to align
With a cost effective um 1.5 degree Benchmark and you can see that in the middle bar chart that is completely red and indeed shows that none of the current reductions if they all actually reductions at all are aligned with a 1.5 degree Benchmark on the next slide you see the
Results of our 2030 Target section that we assess as the central aspect of the Paris agreement and enshrined in the uni C process it’s also really key to understand the climate ambition of countries of course um and we observe that almost all countries have a 2030
Target but none is aligned with the cost effective 1.5 degree Benchmark and only a few of all four have targets that are aligned with their 1.5 degree fair share allocation um that countries are doing worse on the alignment assessments is indicate by the last two bar charts that
Ask for the alignment of a target with 1.5 degrees on the next slide we are then switching from medium-term commitments to the long-term ambition of countries by looking at Net Zero targets um we found out that most countries have committed to a net zero Target usually by 20150 um there are two
Main exceptions one is Barbados who has not zero Target by 2030 and Germany’s at zero Target is by 2045 um I think one interesting observation is that less countries have set near have set that zero targets than 2030 targets um and one further thing I should mention here is that we conducted
The alignment analysis only on high income countries here as antonina mentioned earlier we have income exceptions for higher ambition indicators to resemble the the principle of common budget friendship responsibilities but you will see this through the areas marked with a star in the text and when the accompaning number
Is is deviating from 25 exactly and then on the next slide we look at climate legislation which we assess as an important way for countries to set foundation for further implementing climate action we observed and more than half of the assessed countries have passed the framework
Climate law um and most of these laws specify also accountability elements on the next slide thank you we look at car pricing which we assess as it’s a central mitigation measure to change the cost of emitting and thereby encourage decarbonization um we found out that while carbon pricing system are
Increasingly common only a few of them cover at least half of NA national emissions or set a price high enough to be aligned with the Paris agreement to put in a nutshell first steps are definitely done but further work needs to in increase the coverage and the ambition of these
Systems on the next slide we turn to the largest contributor to climate change fossil fuels this key issue from cop 28 is is really crucial and considered important by investors and we assess here the production and the subsidies regarding fossil fuels um we observed observed that within our whole pillar
Two countries perform worst on very using out fossil fuels there are marginally better results on committing to phase out subsidies compared with ending fossil fuel production and you can confirm this by looking at the bar shots on the right the share of yeses is generally quite modest um the the two
Upper bar shots are resembling the subsidies and the two at the bottom the production and specifically we ask here for coal mines and Upstream Upstream oil oil and gas projects on the next slide we then turn to sectoral transition it’s the last section on on on mitigation and here we
Switch from the economy wide level to the sectoral level and focus on a range of policies related to energy electricity but also land use it’s a it’s a central area of of implementation really that shows investors how countries are really implementing their National targets we observe that half of
The assessed countries have suitable multis sector climate strategies and although most strategies include sector targets they often lack in the end concrete policy actions to implement those targets striking here is probably the bad results in the electricity part that’s the fourth indicator or the fourth bar chart um I should say here
Though that we use Regional 1.5 Net Zero deadlines for the electricity sector and especially 2035 for for high income countries so it’s a very ambitious indicator which could explain uh these observations on the next slide then we turn to adaptation which we assess to understand how countries are managing
Physical risks we observed that most countries have published National adaptation plans but only half of these countries regularly assess the climate risk they face and also even fewer countries Monitor and evaluate the implementation of their National adaptation plans striking I thought where were here maybe the two indicators
At the bottom it it seems to be very common to have a multi-hazard early warning system but less common to be part of a Sant catastrophe risk pool on the next slide then we see the results of our just transition analysis that we assess to to also capture the
Social dimension of climate action um we found out that just transition policy is an area of emerging practice with a of 25 countries having established government commissions responsible for just transition um but but also in general looking at the right side we see that for all of all four indicators
There’s a substantial share of countries being assessed as yes um but there’s still some scope of work to be done within all of these four on the next slide we see the assessments regarding International climate finance and this is really important to consider as international finance is still lagging but it’s
Actually key for meeting the Paris agreement to have Financial flows towards the global South in general we see here that targets are more common ly distributed than the actual contributions probably not that surprising and I also should admit that if High income countries follow their targets we will see a
Rising share of yeses also for the contributions here as well on the next slide we look at the transparency of climate costing um this shows investors if a country went through the costing of its National determined ution NDC or its National adaptation plan nap and this demonstrates that the country took the
Next step towards implementation of its NDC or its NAB and we observed that only few countries are transparent on the cost of implementing the NDC order nap and we should though say that such disclosure may require capacity building in certain countries to estimate future costs which could explain why number
Numbers are that low in this area on the next slide we turn to our last area the transparency on public expenditure towards climate that we assess as it underlines a certain level of accountability and we observe that basic disclosure of climate spending is increasingly common practice the reason
For that could be that governments are accountable to the citizens on how to spend public funds however climate budget tagging the systematic process of identifying and monitoring climate public expenditure is less commonly applied beforeand now over I want to quickly summarize these findings for each pillar um we in the end observed
Common patterns here um in the first pillar we we observed a large emission Gap due to a lack of ambition um of Count’s targets and Trends within the second pillar we found an implementation Gap with insufficient sectoral policies and the lack of commitment to phasing out fosu subsidies and
Production last but not least the third P demonstrated the international climate Finance gap which high income countries need to work towards closing um these observations are consistent with other research work we include the links and here that’s for example the emission Gap report from unap um for you to further
Explore the slides will be shared after this webinar but yeah if you’re interested in more results especially the quantitative results please visit the tool um which you can find on TPI Centers website and by that I’m I’m closing the results section here and hand over to the market participants
That are listed um here on this slide starting with as the law maybe you can quickly introduce yourself and later then pass along to the other speakers thank you sure uh thank you johanes um good morning good afternoon and good evening to all of you thank you so much
For dialing into the rebar indeed you have had a very solid session from uh Lena and also from Johannes um so I am the senior portfolio manager and also responsible investment lead for amuni Asset Management I have been involved um in the development of the ASA project since the
Very beginning for the past two years it has been really an amazing journey to work with a group of professionals from all different backgrounds including as as owners asset managers climate experts investor networks and also some of the mdbs um who are you know equally passionate in bringing about a standard
Which we all can use and Trust to assess and sing climate risk so bringing back you know askco and asset management from a senior PM perspective and with amundi being a member of The Net Zero asset managers it is Paramount for us to have a goodp framework to formalize the
Measurement of Net Zero alignment both from the quantitative and policy perspectives to enable us to reach our global net zero OB objective by 2050 to better understand the relevance of ASCO um for us it is useful to highlight that for Net Zero asset managers there are three endorsed targeting Target setting me
Methodologies and they are Paris align investment initiatives Net Zero investment framework show con neive ass science-based Target Initiative for financial institutions and finally Net Zero asset owner Alliance Target setting protocol so ASCO specifically um address um investors ability to implement nessip by providing a very transparent tool as Lena already highlighted in The
Sovereign space which we don’t really have at the moment so specifically the ASCO the way that the ASCO pillar um are designed which actually have been through a lot of uh discussion during the the um the the the design process um as per you know earlier Slide by lenina
Uh is actually can be mapped back to a lot of the nessf criteria um specifically uh ascort is able to provide a lot of data that nearly cover all the andf criteria noticeably the s a class criteria of ambition emissions performance decarbonization strategy and just transition as per johannah previous
Discussion I would also like to highlight that um the ASCO is the only Sovereign assessment framework developed with and also for investors and has designed features especially to set up to enable Sovereign engagement and policy advocacy which is also one of key components for n in this context I’m
Very excited to finally have a structured Fair and free too to assess the Net Zero progression of our Sovereign Nets Sovereign debts Investments with the support of a better data availability as well as the design of the ascore framework we can then integrate and thus further enhance our
ESG investment process in The Sovereign space finally I should also mention that you know ascore also helps to standardize the reporting um reporting requirements and indicate to um Sovereign issuers what investors are looking for from them and leveraging on this will be the anchor of Engagement discussion either bilaterally or
Collectively uh with the Sovereign issuers and as well as um promoting the development of the sustainable Bond issuance so let me pause here and pass the floor to my peers um Claudia to share her thoughts thank you thank you very much uh Esther um Claudia go I’m representing cult just
The Global Investors a asset manager and I’ve also been this Esther acting co-chair for the ASCO project since the beginning um just adding on to what Esther was mentioning um additional issues the broader investment Community is grappling this and how the ascore framework might be able to help and overcome some of those
Issues so the issues I’ve be thinking about um are the regulatory reporting challenges we all facing identifying credible kpis for labeled bonds and also we’ve got this missing Sovereign engagement tool so let’s start with one of our most favorite topics the reporting requirements investors like us have been
Ask more and more to disclose uh on their portfolio Holdings is it either for reporting or regulatory requirements and we can think here of the EU sustainable Finance disclosure regulations also known as sfdr or also asset owners uh who have have signed up to Net Zero commitments are asking for further
Disclosures and that’s on the basis of what we have heard before already is we don’t really have a sovereign disclosure framework to date so hopefully ASCO can come to the rescue here and help with some of those indicators um and provide some disclosure indicators for regulatory reporting reporting purposes for asset
Owners but equally asset managers might find it useful to integrate some of those factors within their Sovereign Bond analysis staying on the investment side um as Esther already alluded to we have seen more Sovereign issuers coming to the market with um labeled uh bonds but however uh investors have been
F find it sometimes a bit challenging to determine if these chosen indicators or kpis for example for sustainability linked bonds are robust enough and therefore again asore could be quite useful as some of these um indicators if um issues would be willing to use those as have’ been independently assessed within their framework
And I think that would be a win-win for both investors and issuers as the more credible kpis would be um used and would be there attracting more Capital flows into these bonds and obviously investors like us would be more comfortable with such independently assessed indicators within the analysis and for investing
Purposes and I’m sure we’ll be hearing more about this from our issuers um on this uh webinar later on and last but not least um ASCO has been created to inform um Sovereign engagement in a consistent fashion and just before we go on on that I just want
To make sure we all clear Sovereign engagement is very different to equity stewardship Sovereign investors do not have voting rights and sovereigns um you know responsibilities lie clearly with their citizens but that doesn’t mean us investors cannot engage and we have been engaging this issues for many years um
Either as EST as it individually or collaboratively and but the differences what we have been engaging with in the past have been much more around um governance indicators or governments budget developments structural reforms and hence when it came to um the topic of climate that has been a bit of
A challenge in the past simply because we had the lack of information or the inability to frame this conversation and that’s why it’s been very helpful as well having the PRI uh launched in September 2022 a pilot project on uh collaboration or with collaboration on with institutional investors and seek to
Engage with the Australian government on climate change risks and opportunities as a member of this uh collaborative investment investor engagement group ascore indicators will certainly be very helpful in shaping the Australian government engagement work further and we’re looking very much forward to translating or trans um forming those uh indicators into much
More broadly focused um engagement Frameworks beyond the Australian work so I hope with some um highlighting some of those um issues the broader investment Community is facing and how ASCO can uh help overcome some of that you found that very useful with that I will be
Passing on the Baton to Al Andra Bo from the German agency hi thanks Claudia um hi everyone thank you for having me to speak um here today um I’d like to touch on three points really um why why is ascore in my opinion useful for my work um and I I
Sorry I should have said I um I work for the German Finance Agency which is the Deb management office of the Federal Republic of Germany and we were one of the uh group of the first uh sovereigns that were um assessed by uh the ascore
Framework and uh I I’d like to say why why is this useful for my work um and uh what were my experiences um with dealing with uh the ascore team and the assessment and also finally why do you think this is important why do I support
It so um uh this is a useful thing for me especially in in my work as uh the person speaking to investors and telling them why to invest into German government bonds because um it’s a very transparent um measure methodology and framework that gives me um a very good
Idea of what is important to investors what um factors what kpis what policies are important to investors when assessing um the climate change performance of us as a whole country um and it helps me understand this in in a very um efficient way to be honest um because otherwise I would have
To speak to every investor individually and I would have to try to get an idea of individual um scoring um or rating or internal flagging models that investors have or external ratings they use for sovereigns which again uh tend to be quite intransparent for us and as an issuer
And there’s quite a lack of dialogue with us as Sovereign issuers and uh therefore I think this is this was very well done by uh the ascore team is to reach out to issues very early on um discuss their methodology with us so we understand it uh better and also give us the
Opportunity to give feedback on result U was uh in my opinion very well done so uh we can follow very uh very well uh how we are assessed and why the results are what they are and how we can improve and where we in at least from uh from an
Investment Community point of view where we need to improve as a sovereign to um to to get uh a better a better result um while working um or actually uh especially in the feedback round um of course you find some challenges as well um our major challenge to be honest uh was an
Administrative one so uh as a sovereign for other sovereigns that may be dialed in uh who haven’t been assessed yet um you should plan quite a lot of time uh in order to look at the first results and give feedback of them because there’s just usually for Sovereign many different
Ministries and parties departments in involved in in um looking at these results and uh to involve them all takes quite a lot of time toe the usually quite hierarchical setup of um of sovereign governments um from the results themselves we didn’t uh I I I can’t really give any negative
Uh feedback or any negative um uh examples I think we only had one area where we where where our uh National Data was um different largely to um to the ascore data which was uh uh Lulu CF land use land exchange and Forestry uh numbers did did differ quite
From our national numbers but that was the only area where we kind of uh saw a lot of discrepancy to how we see ourselves and uh obviously also it was very comfortable to have all the assessments done by the ascore team without us having to uh to report and
Deliver fig but all the work was done it was done really thoroughly and uh we couldn’t actually ourselves add that much or find that much that um that the escort team didn’t find uh them themselves so um all in all uh it was um quite easy and comfortable to work with
And um this all um all helps me to um to get into a dialogue with invest regarding regarding how they um see us as a country regarding um especially in this case climate change factors but also other um ESG factors and why do I think this is
Important um I’m a firm believer that ultimately and in the long run also in the not just in the equity Market but also in in the fixed income Market uh where we are um Also regarding sovereigns ultimately it will play a role in everyone’s investment decision um how a country performs
Regarding uh sustainability factors um of which this is of course just a a small part or an important part but uh just a part but I do think um this will be an important uh decision-making factor in the future and I believe this was also mentioned as one
Of the goals in in the beginning of of this webinar I do firmly believe that um we should just as we do as consumers um when we buy Goods we look at or a lot of us look at is it produced organically is it fair trade is it shipped CO2
Neutrally um are animals protected uh all all those kind of things play a big role for us as consumers nowadays and we are willing to pay a higher price for uh an organic grocery versus an non-organic grocery I’m paying a higher price for fat rght coffee versus normal coffee all those kind of
Things are uh play role in in my my um decision to buy a product or not and I’m willing to pay a different price for it and I do believe that ultimately for asset owners this should also be um a factor or H factors in in general should play a
Role in the price discovery um when they invest into assets and therefore ultimately steer Capital much needed Capital into um sustainable investment into all the Investments that this world needs uh to to uh fight climate change and what better way to to make make um make
Issuers uh um uh move and uh and get better and perform better than um to tell them look uh if uh I’m I’m I’m willing uh to finance uh your project um at at a lower rate than um if if it’s a non-sustainable project so I think this is where where
We’re ultimately going and I think um it’s something that is still developing and currently we we have a lot of label products to kind of go into that direction but it is uh something that should should ultimately also philosophically be be um a part of of
Our thinking and of um how we act um in in making a decision regarding our investments and therefore I encourage everyone who’s part of this big value chain of an investment decision from the asset owner who makes the ultimate decision but also of course asset managers issuers rating agencies and so
On and so forth um to support projects like this that make one of these important factors very transparent to everyone at no cost thank you and with that I’m sorry I um I probably have to pass on um uh to uh my colleague from uh who’s here from Uruguay from to Hamman
Kamam thank you Alexandra and good afternoon my name is Herman Camille I work at the the management division of the Ministry of Finance of uru first I want to thank the the organizers of the project for taking our country into consideration as being part of the first
Phase of ascor we are proud to have been selected the ascort tool provides an independent assessment for a cross-section of countries on their climate Frameworks policies and Targets in place but also on the ensuring mitigation and adaptation risks that our countries face it was mostly developed with investor community in mind yet it
Also helps countries like ours identify opportunities to chart the path towards sustainable Sovereign financing strategies in this sense I think it’s a strong Foundation to promote the dialogue and engagement between issuers and investors it’s almost like a coordination device between supply and demand for Sovereign
Bonds uh in our view we think the tool is very well thought out it has been crafted crafted after an extensive uh detailed public uh consultations it provides very transparent rigorous and independent analysis and it’s also based on recent data and the and the interface is very user friendly and attractive we
Had a chance to interact several times with est Carmen Claudia and Victoria since December 2022 mostly through Victoria Rio from our debt management uh division so we are glad to see when when we saw it was brought to life back in December so in what follows I will T
Touch upon some of the key them underlying the tool and how it connects to the key features of Eur wise sustainable financing strategies I want to highlight the practical ways in which it has helped us so far and I will conclude with some suggestions on how the tool would be furthest strengthen
But without detracting in any way possible from the value EVS so back in October 20 21 When U was chairing the World Bank IMF development committee we first Advanced the idea that we needed to develop new international climate Finance instruments that embedded positive Financial incentives for countries to contribute to Global public
Goods such as for example mitigating greenhouse gas emissions or nature conservation so aligned with this Vision in October of 2022 uh we issued a sovereign sustainability link bond that directly link our financing strategy and cost of capital to two key performance indicators reducing the intensity of greenhouse gas emissions in the economy
And preserving the area of native Forest the sustainability performance targets we use for the skpi came directly out of our ndcs and we set 2025 as our Target date so the goals are very demanding and the deadline is also ambitious the bond included a break through Step Up step
Down mechanism as it’s known and as part of our design of the S SOB Uruguay accelerated the reporting of our greenhouse gas emissions from a bnal to annual frequency in line with the standards of most developed economies Additionally the reporting an external verification will continue over the life
Of the bond and past the trigger date so given the purpose and design of our financing strategy let me highlight two or three key areas that connects directly with the ascore project the first one transparency and accountability in our view this is the real hard currency of the bonds transparency and accountability and
Ascor puts places a lot of emphasis on those key issues so for investors uh that that want to buy an SB or are tracking an SB it provides clear markers that are easier to track and report to assess what is the environmental impact to demonstrate the level of ambition of
A country what is our directly direct contribution to Global CL climate efforts and of course as they monitor progress they also it helps on pricing our own bonds now for investors who have confidence in the performance tracking mechanisms of an SLB offering including the one from U they need to be assured
That the data pipelines feeding these kpis are tamper proof that they are durable they are accessible online and they’re open to scrutiny part particularly across administrations so in particular the pillar one of the ASCO project is very helpful in in monitoring the progress on this mitigation goals and how the
Ambitious targets are set to be uh accomplish by looking at the evolution of kpi 1 so it’s putting front and center accountability transparency and Reporting on progress towards our environmental goals the second theme on the line with think ascor is governance for putting together an SLB like the one we did for Europe
Wide we were spanning the whole greenhouse gas emissions of the economy and all Native forests across the territory so necessarily we had to interact and Galvanize and coordinate with four different Ministries the Ministry of Finance the ministry of industry and energy the ministry of environment and the Ministry of
Agriculture and livestock production and trust me it took a lot of coordination and persuasion to put together a a credible framework and then to monitor progress over time so the information that is compiled under pillar two of ascor climate policies I think helps to reflect on that strong interministerial coordination and the governance
Arrangements that are critical to ensure a t a timely and reliable provision on the data and how you communicate regularly on progress with investors in a achieving the sustainability targets we tend to think or we like to think that in putting together this kind of
Bonds the most of focus tends to be on the E part of ESG because it’s environmentally focused but there’s a lot of G inside of this ESG Bond because it requires a lot of uh governance in in in in in putting together this whole project and the third theme that I think
Is important when it comes to uscore is the focus on commitments particularly on ambitious commitments and if you think about the SLB for EUR why in essence what we are doing is we we through this Bond we are making our environmental commitments under the Paris agreement financially binding so meeting or not
Our Paris agreements will have Financial consequences and there’s a lot of focus uh in in in the ASCO project on the NCS of this of each country so there’s very much aligned with the idea of having Paris agreement goals embedded in your framework so uh this is also very
Important because in in achieving those uh those goals and setting the policies there’s a there needs to be a lot of coordination across Ministries so now uh on on to the second part where where some things where we think it can be improved and or further strengthened the
First one ascore project the ascore tool has a very big focus on fossil fuels Energy Efficiency and energy intensity and understandably so right now in for some countries and that includes UWI our greenhouse gas emissions the nature is very much skewed towards the carbon emissions tied to agricultural production mostly mean
Emissions and n2o so uh as a food supplier to a growing world population the challenge uru has is to meet is to boost our livestock production which is an interior part of our economic fabric but at the same time reducing the intensity of meane emissions so as the
Asore team is poised to expand its set of countries included in the in the project we suggest to widen uh the concept of uh carbon emissions Beyond carbon dioxide and include more explicitly other sources of greenhouse gas emissions so that would be our first suggestion the second suggestion on the
Frequency of data provision now transparency is very much also tied to the frequency or the ability that investors have to be continually monitoring uh the evolution of the kpis and one of the big efforts we put into the SLB was to shorten to make the the data availability more often and more
Frequent sorry and to reduce the timeline compared to the observation date and that’s in itself a way to embed Market discipline into the bond is to be able for uh to be able to hold yourself accountable more regularly so uh it brings Market discipline to completion
To be able to increase the frequency so that on on data reporting and the lags so we think this could be two areas where it would be interesting going forward to put more emphasis and finally as a third suggestion which again doesn’t belittle on on on the effort
That we that that you that you guys put is uh the the the ascore project incorporates one of the the itm lines is the concept of protected areas as part of the of of total land and we think uh that’s very much Well Suited I think it could also benefit from incorporating
The ASCO project more focus on biodiversity and here I link it with our second kpi which is our zero deforestation commitment on the native Forest Area so to conclude to achieve the commitments all stakeholders countries meaning Sovereign issuers asset managers asset owners financial institutions we all must have
An open dialogue and we must hold each other accountable on the pledges and on the actions we take because we are all looking towards a common goal which is the transition to a low carbon economy because at the end of the day investors want to know that they are having a real
Impact on issures and issures want to be sure that their efforts and their progress is adequately recognized and even rewarded and this fundamentally requires having consistent up to-date and climate data that is macro relevant so the ascort tool is a big step forward in this direction thank you and handing
Over it now to Adam to moderate the Q&A brilliant thank you very much Herman thank you very much Alexander and thank you very much everybody else that has spoken so far so this is the question and answer session and you have been busy submitting many questions and the
Aim is to do them all if we don’t get them all covered we will put answers to them up on the the website but I think with this super duper panel we’ve got here it’s going to be quite possible to cover them um I would ask our responders
To keep their responses short and Punchy um but some of them I suspect are going to be a little bit more technical um there they sort of fall into a mixture of technical questions and um some more principal questions but we’ll work through them and see where we get to and
Just before I do just really appreciate the comments from the the two issues from from Germany from uy both of those really thoughtful comments really helpful in in hearing the feedback from you and also in helping us shape the evolution of this tool because it is the
First iteration and it will evolve but um really welcome the the the the response and the usefulness that you see in it but also the areas that we can further enhance it and really message to everybody look at the tool engage with it and then really do sort of engage
With the team behind it and and equally with the the the investors in the asore project so first question um we’re going to it’s Victoria vong um and this is a technical few questions so I’m going to um fire through them probably the first one to antonina for the emissions pillar
For the emissions pathway pillar do you also think about the credibility of commitments so other countries actually achieving their Ambitions thanks uh Adam this is a great question thank you for asking this um I think very much so we do look at credibility um the the areas that you
Saw mapped out as contributing to implementation the aim there is very much to give investors a better idea of how credible those targets are if a country has a very ambitious uh medium-term or long-term Target but no policies in place that would cause mitigation outcomes that is sort of an
Indication that that Target is a bit less credible um the other area that that I would point you to is the emissions Trend section where we don’t just ask whether emissions are going down we actually check if that rate of reduction is aligned with where they
Would need to be U over the next few years to meet their own uh 2030 benchmarks um so that’s built in in other parts of the tool so not within the target assessment but in other parts of the tool you can get a better idea of The credibility of those targets and how
Often will that emissions pathway be updated is that annually yes so all ascore assessments will be updated annually excellent and so whilst we’ve been on this call I’m I’m dialing in from dialing in I’m logging in or whatever it is from South Africa so I’ve been looking at the South African
Trajectory against their NDC against their pathway and it’s extremely helpful to get that insight for the dialogue we’re having and attendant have with um related to the bonds that we have for South Africa so next question how do you differentiate uh the fair share budget one and a half degree and the national
One and a half degree budget um yannes is that for you yeah I can so we use the fair share allocation to balance the 1.5 cost efficiency P um maybe quickly step back the 1.5 degree benchmarks are retrieved from a global coste efficient Benchmark which is then harmonized but
Also downscaled by by a different bya different methods and you retrieve by that a national um National Benchmark which is though built upon cost efficiency we complement this with the fair share allocation where we take a global pathway and calculate different country weights um you can take different Equity principles we use the
Principle of equality capability but also s responsibility to calculate a national weight and by that then downscale um This Global Pathway to retrieve fair share allocation um so we have in the end two benchmarks which we can compare countries Target to thank you very much and other well
Picking up part of the comment from from Herman as well is are there any considerations for biodiversity and can you clarify how carbon credits are considered Ed especially if these are sold to other countries and that’s from Brian Carter thank you for the question um I can take the point on biodiversity and
Then maybe hand over to Johannes to talk about offsets um the biodiversity question is very important there are many ways that this um synergizes with climate action so the way that we do that is through the indicator that uh Herman mentioned specifically which is um the area um the percent of of the
Territory of the country that is under protected area um and this practice can both reduce emissions and and preserve um emissions that are sequestered in forested areas or other ecosystems um but also can Pro protect the biodiversity of a country and we actually modified that indicator previously from being about forested
Area coverage to being about protected area coverage and the reason for that is is because um through the feedback we were told that there would be interest in in making sure that we have indicators that are more as much as possible do have a bit of more of a
Synergy with biodiversity and so looking only at forests you would have a bit less of ecosystem diversity whereas when you look at protected areas there’s many different types of ecosystems that can fall under that um just on the question of generally building a whole entire framework that would evaluate countries
On how they manage the biodiversity crisis I would say there’s the need for potentially another framework to do that in the right way um ascor was built to do climate um and it was an early question amongst the project Partners should we also make this about diversity and there was agreement that although
It’s important and we should include it to the extent that it synergizes with climate challenges um it does need and deserve its own its own framework and its own uh dedicated evaluation I can just quickly touch base upon car credits we had lots of discussion around Caron credits article
Six offsets in the end we had a certain scope of of the of the framework of course like we had to limit the number of areas and indicators and regarding come credits it was a question like how can we buil an indicator which is which is which which
Can be valid for every country so we integrated this in ep23 within 2030 targets and ask if a country is transparent on the potential usage of C credits um we would have loved to go more into detail but like to different countries into buyers and sellers would probably stand against our Market
Principles so we ask specifically for transparency um regarding carbon credits within the 2030 targets area great so we’re going to do a few more technical ones um before we have some broader questions so uh turn into Isaac Ray Delgado from Santander Asset Management how is the import exported products
Emissions um is adjusted in the methodology is there expected feasible to include it is it is there yeah Is it feasible to include it antonina or yanis thanks yeah very briefly I’ll keep it brief but we do assess uh consumption based emissions as well as production based emissions you can find both of
These you can toggle through them when you come to a country web page and look at their Trends in consumption based emissions and uh production based emissions for consumption based emissions as you mentioned it is very complex to measure that we rely on the oecs data set um and they use input
Output uh tables to make those uh assessments and those calculations so we draw on oecd there is a downside which is that the latest data available is from 2018 um but we are monitoring in case there is uh more upto-date data uh from an authoritative Source over time
Excellent and turn to Mari Bert from DWS for the policy sector transition policy assessment will more detailed criteria indicators be added in the future Mari always wants more very briefly I would say we will um likely be developing the framework further over the next few years this
Year is very much about scaling up the coverage uh then in 2025 or 2026 um it could very much make sense to re sort of rework the framework expand it um focus on on where policies have developed the most so there is uh definitely scope for
That so as um I’m going turn to so our investor colleagues um as well in a moment um before I do there’s a number of questions in relation to whether the the slides is going to be made available yes they’ll be sent out this recording
Will be on the website um on on the TPI Center website as well as the ascort website um there’s a number of questions around engagement um and Alexander and Herman both question to you in terms of just to think about before I first of all go to my investor colleagues what
Makes a good Sovereign engagement engagement from your perspective with a tool like this how could it be different from the engagement you’ve had today I know you reflected partly in in terms of how that could happen Alexander in your comments but um but before you answer
That could I just ask um perhaps Claudia in terms of Engagement you’re obviously involved in the work in relation to Australia um but how do we see that landscape evolving is there going to be a climate action 100 related to countries I think um thanks so much for
The question and a very good question because obviously Sovereign engagement has been lagging um on the corporate side or the equity side but I do think having now a framework available such as ascore it should be evolving further because now we can actually frame those questions and we have the same
Indicators for each country within the or assuming within the same income group and those can be expanded and that helps investors and I guess issuers as well that we all talking about the same indicator the indicators have been assessed independently and will be reviewed on an annual basis on a country
Specific side but also having this concept of fair share principle applied um helps also to uh compare countries against their peers and raises more questions and that’s been very helpful on the um collaborative uh in engagement site in the case of Australia which I would very much expect to expand into
Other countries going forward but in interest of time I’ll pass it on to the issuers as well to hear their comments yes please Alexandra or Herman if you have any um thoughts in relation to what good looks like and what would be [Laughter] helpful um I think a generally a a good dialogue
Um is always one where you show transparently what is what is important and what really influences your decision making and what you should therefore uh transport also i’ I’ve seen a lot of questions going into that direction as well from a debt manager to um to actual politicians and
Those who make policies uh for us for the whole country so um it’s I I I mean these things are a little more um complex for us as sovereign debt managers um who have a dialogue with investors of course um who are I think in some cases still kind of getting used
To getting into more dialogue with investors especially not just regarding our issuance uh program and um uh so on but uh also uh regarding um the profile of the of the whole issue of the whole country which is obviously not really in our scope or our hand as a
Uh as a debt management office and we have to transport those messages to uh those who can make decisions and can uh make changes and yeah I I think um we’re we’re kind of uh um we’re those for you who can transport the message if not uh if it’s not uh if if
You don’t want to transport the message in a way that uh where you tell us I I won’t give you Capital unless uh you do such and such so um if you want to be less dramatic and just give get get uh a message across I think uh we we’re the
Ones who can who can do that and I think the ascort tool makes it easier for us because it’s not hear say so to say it’s not us talking to investor and trans transporting the message saying you know we’ve heard a lot that you know there’s
A lot of critique uh for example for Germany regarding the late um exit from coal um it’s actually it’s transparent it’s public uh it’s a fact so we can it’s supported by lot of uh institutional investors and therefore it’s easier for us to transport um why this is um an important
Topic uh to deal with also regarding our Capital Market entrance as a country thank you that’s really helpful and and Herman any Reflections from you uh yes well in our case as we were putting together the the structure for the slbs we had quite extensive interactions with a lot of investors
Almost 100 I would say over the year and a half and that was because the product itself was was new we were explicitly incorporating Paris agreement commitments inside a sovereign Global Bond but also because for the first time we were asking investors to accept the product with a potential step down now
Given given that engagement uh I can tell you two or three ways in which uh the ascore tool has already been very useful for for us the first one is back in May of last year uh we had to uh publish our first sslb annual report it
Was the first time that a sovereign was publishing an annual report for a sustainability link Bond and and we had to update the performance of the kpis through the year 2021 and as you know the the annual report follows the the igma principles which are voluntarily guidelines on on
Post disclosure yet Beyond those requirements at the Ministry of Finance we engage with key stakeholders to factor in what were the market expectations on the reports content and and one of the key stakeholders was where our colleagues at at ascort and we had a lot of back and forth on what they
Thought would be a a good content or investors would be expecting to see given the kpi so that that helped us a lot in in preparing in May 2023 our first report and for theom second annual report of the SB in May 2024 there are some angles included in
The framework that while they are not directly uh connected to the two kpis we have it would be important to cover them in the in our in our report so that that’s going to be also useful because going forward I expect that this tool will anchor a lot of our uh interactions
With uh with investors on on progress towards meeting our targets the second way it has helped us is as you can imagine putting together this Bond and given the the number of Ministries involved um there was a lot it requires a lot of coordination as I as I
Mentioned I lot go back and forth and you shouldn’t underestimate the time it takes because sometimes you get lost in translation because uh Ministries can be talking different languages no Ministry of Finance looking at from the side of international finance the ministry of environment from the sign of climate
Data so when we were filling the questions for this project and the back and forth on the feedback that required a lot of interaction from us with the ministry of environment on how how should we answer this question where is this data available how can we track
Progress so it helped us also to continue to Galvanize this coordination uh among within the public sector so those are the the the two key areas where where it has been helpful so far brilliant well thank you for that and um really really appreciate that and and I
Think one of the key s of things I think this tool is going to be able to do is is to really enable dialogue about how do we help country and enable countries to achieve their objectives and it provides a sort of Level Playing Field in terms of assessment that investors
Can use to be able to sort of have that very pragmatic conversation from a constructive perspective and um and and I think that’s a really helpful way of basing a lot of the best engagement that could now ensue um there’s a number of questions around um emissions and and
Also com bit differentiated and um antonina and Johannes do feel free to answer some of those in in the chat written function given the time but I’m going to go to ree um Pam’s question which is first of all to thank you for putting this together um but the
Principle of common but differentiated responsibility seems well addressed across countries but it’s not an it’s not as apparent within country country assessments were there any constraints in arriving at a measure to assess efforts to address poverty vulnerability capabilities as a co- benefit of climate mitigation action gosh this a very long
Sentence Beyond traditional just transition cons considerations or was this not a priority um antonina that’s a one I’m going to direct at you to begin with yeah sounds great no it’s a it’s a very good question um I would say first that in the early stage when we were developing the investor expectations
There was a very strong um desire from the investor Partners to ensure that some level of just transition and social uh social justice would be included in the framework as you mentioned um because the osore tool is really about climate we needed to focus on how really
Those places so it’s it’s kind of the same answer as the biodiversity question um we look at the social areas that synergize and overlap directly with climate action so we have the just transition indicators we look at distributional impacts of carbon pricing has the country assessed that and and
Checked um how maybe certain U more vulnerable uh citizens will be affected by carbon pricing for example um within our adaptation indicators adaptation plans um can be assessed and monitored in the sense of how do they especially Target more vulnerable people within the country um so there are ways that it’s
Woven in um but there isn’t an explicit uh assessment of of poverty in general terms I would say the only just transition indicator we have which is very much about the foundations of just transition and isn’t very much related to climate change um and I will plug
Again that this was a result of the consultation and an important desire to see this reflected in the tool um and that is the indicator the first indicator in just transition um which looks at whether the country has ratified a majority of fundamental human rights and labor rights uh conventions
So ratification is is a not the same as signing it’s it’s a quite um robust way for countries to demonstrate that they’re integrating those International conventions into their domestic laws so that’s how we’ve addressed that broad broad broad question of of Human Rights and and social justice excellent um conscious we’ve got
About seven seven or eight minutes left of questions so um we’re going to have pun answers we’re going into The Punchy round um I’m all these Kings put a few from JP Morgan um the one I’m going to choose is do the absolute emissions calculations include all emissions within the boundaries including overseas
Territories and Maritime I are foreign corporate owned facilities counted alongside state-owned Enterprises in the calculations uh the quick answer is we use the Prima uh country reported data for emissions um so my understanding is it’s territorial emissions it’s it’s what’s within the territory of the
Country but you can you can check on the Prima Tool uh Prim app tool exactly what’s included yes and also the mention uploaded to unit from C ratory are also territorial to Define that that way excellent um this one I’m going to um there’s a question from Lenny an MBA
Student in the US thank you for joining us Lenny um and I think this probably is going to go to Victoria or Esther um what about add an a cour action for interested investors connections to country specific bonds issued or to be issued or is that beyond the scope of
This or appropriate I would add so sorry I’m not trying to guide you there but anyway Victoria or Esther yeah I’ll make it brief um look I think given the am of interest in this tool that would be a very natural step forwards at present um the ASO project
Was to cre to create this tool get it off the ground and get people talking about it and and using it um but you know if people want to see that moving forwards that’s definitely something that we’d like to hear about uh Claudia I know you’ve already been doing a lot
Of work with the Australian government um so I’d probably say you know uh perhaps I say watch this space es I don’t know if you have any other thoughts or Claudia yeah I think on the the KP are going to be quite useful going forward to creating more Innovative uh products
And I think as Herman already noted it has been quite useful as well uh for those products um going forward as well because each country will be different and I think that’s quite useful for being able to choose those different kpis which are suitable as well yeah I would just add
You know just the whole ask or pres you know presence existence come to the current state is to have a definition in place is to have a standard and that is already underlining the further development of various sustainable products but we cannot have like one blanket fit fits all just because
Different country has different n ncds and they also have different um you know different areas that they would like to to improve on so it would just be also unfair to have a know one particular uh kpi to be applied to the same um group of countries so the next question and I’m
Not sure if it’s a question but I’m going to interpret it as a question rather than a statement of what USS Investment Management are doing but it’s Thomas philli um are you in discussion with providers to incorporate ascor metrics methodology for The Sovereign Bond indices rather than perhaps a
Statement that USS are doing that if I’ve interpreted that incorrectly um please do put that in the chat but um just to say that look I’m going to answer that one because we’ve made ascar available and we’ve tried to make it as accessible as possible um we know that
There’s a number of interested um uh providers index providers that are actively looking at how this can be integrated um we would encourage people to really sort of consider the ways that they can use ascore to help inform their um different um approaches and if anybody has any questions in relation to
That then get in touch with with ascore um and the team here we want this to be practical usable and clearly the more integration into um the market the better um there’s obviously data licensing issues we’ve tried to be very clear and transparent around that and so
Just be conscious of the elements it is free to use um I think when you get into the product space it’s worth just reading and checking those elements um but we we’re very keen to have those um see those discussions evolve um unless um any of my colleagues want to add
Anything to that I’m going to uh move on to yes a question from clemont gallopin um is analy for ethos Foundation regarding the current coverage of asore tool while I understood that the focus was to put was put on the most impacting countries the coverage relative to The
Sovereign bond market raises a question indeed I’m wondering if the limited coverage limits the opportunities for investing Sovereign bonds of less impacting issuers issuers that are smaller less impacting in terms of emissions would in principle be more vulnerable to climate change and potentially benefit more from additional Capital allocation for those increased
Risks what’s your view on that um I would ask antonina from the sort of technical perspective in terms of how we selected this first tranch of countries and then if any of my investor colleagues wish to comment on that yes uh happy to um I would say the
The first set of 25 countries were actually purposefully chosen to get a cross-section of income levels emissions levels um Reliance on fossil fuels and policymaking systems um and the aim there was actually to get a high sort of diversity in the sample so that we could test out the framework that’s why this
Is sort of the pilot group of the first 25 countries to see that uh and to ensure that we build a framework that is applicable across this this wide range of country circumstances um this coming year we plan to publish 70 country assessments and those have been selected
For now based on inclusion in the largest um Sovereign Bond indices um and taking sort of prioritizing the with with a higher weight the idea here is just prioritize usability um and very much so one of the aims of the engagement is to encourage emissions reductions amongst those countries that
Are that are high impact um it does raise an important Point uh this comment about countries that are lower um lower emitters and how they need a higher access to Capital perhaps there are other tools that can complement that but we do still assess uh lower middle inome
Countries as part of the World Bank categories and over time we will cover the whole investable Market that’s that is the target fantastic well look I was over ambitious in promising answers to all questions although I think we’ve covered a good to 20 odd questions um by one
Degree or another um we will look to try and distill answers to the the those questions that um we couldn’t answer and have some more generic uh responses that cover all of those can I just say thank you to everybody that has worked on the ascort project um this has been a huge
Undertaking in over um a couple of years I’m quite I mean it’s incredible to think where we’ve got to in this time that we’ve done obviously the challenge is enormous and I think the fact that we’ve been able to have inputs from governments in the design in terms of
What’s actually helpful and going to be constructive in the dialogues that investors can have with governments has been hugely informative to us from a technical perspective but also in ensuring that ascar is actually relevant and does something both for issuing as well as those um the in in the
Investment Community I do think that it is a really important um contribution to how we as investors understand climate risks and opportunities and we do underline that it’s to really give that sort of comprehensive picture to enable us to then have those dialogues to embed that into our own understandings
Individually in the in our individual funds and to really ensure that we can play a role in the way that we um engage and stward assets but also so I think really support the transition in in countries so I particularly want to say thank you to Victoria Baron um she has
Been an enormous champion and energy behind this and Relentless quite frankly you should see the number of WhatsApp messages we all receive and also to Claudia and Esther um because I they have been tremendous in supporting us as a sort of um quad um chairs of the
Initiative but behind that we’ve had a steering committee of investors and all the investor networks as well and a number of funds that really came in the first of this concept to say yeah we’re going to work with you we’re going to support this we’re going to put our
Expertise we’re going to pull it because we know that the market needs it rather than we create our own thing and we just sort of go off on a tangent we’re going to create something that’s transparent public available to everyone and really for the common good and I do appreciate
All of those that have contributed and last but not least the academic team um because quite frankly unless there’s an independent academic rigor at the heart of these things I think we will always have um a challenge and they’ve done a tremendous job and we’ve really appreciated their expertise and the
Disciplines that they’ve brought to the project so in particular the two on this on this call that have spoken and have really pioneered a lot of this and taken the feedback um and really sought to do that in a very robust and transparent way so in terms of next steps um annual
Assessments as it stands RIS to 70 countries in 2024 and then more than 100 thereafter and then really continued analytical reports um from from the team and we remain open to taking that feedback further um enhancing the whole framework and ultimately supporting collaborative Sovereign engagement as
Well so thank you all very much greatly appreciate the time in particularly from our um colleagues from Germany and Uruguay and everybody that has joined us today and and uh we look forward to keeping in touch with you thank you