Human rights for ESG investing – World Bank article

How to use economic and social human rights for ESG investing?

We’re delighted to have a new article published by the World Bank that explains the potential implications of using economic and social human rights for ESG investing:

“The Potential Implications of Economic and Social Rights for Sovereign Debt Investing” (English). Gratcheva, Ekaterina M.; O’Reilly Gurhy, Bryan; Wang, Dieter; Brook, Anne-Marie; Clay, K. Chad; Randolph, Susan. Equitable Growth, Finance and Institutions Insight Washington, D.C. : World Bank Group (2023).

Here’s the abstract:

« This paper discusses both the relevance of economic and social rights (ESRs) for environmental, social, and governance (ESG) investing in the sovereign debt asset class and how to start incorporating these rights into the investment process in a practical way. Many in the investment industry recognize the potential role that investors can play in influencing a country’s decisions on environmental and social issues, including human rights. Investors are also increasingly acknowledging the potential to influence a sovereign’s actions on social issues, such as ESRs, given the state’s direct role in providing a pathway to social advancement for its citizens. The rest of this paper is organized as follows. Section 2 explains the relevance of ESRs to the sovereign debt asset class. Section 3 introduces the income adjusted ESR dataset, and section 4 illustrates the insights that this dataset can provide for sovereign debt investors. Section 5 provides one practical example of how sovereign debt investors could use such a dataset in practice. Section 6 presents our conclusions. »

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