Undaunted by the ESG challenge

Undaunted by the ESG challenge

Introducing the series: eight charts, four challenges

The word ‘chart’ originally meant ‘a map for the use of navigators’.

In a world where the sheer volume of ESG data has left many a fixed income analyst all at sea, we choose eight of our favourites to help you negotiate four key challenges ahead.

Each article and the charts within in it draw attention to a different area of the fixed income universe, from sovereigns, to emerging market debt, to investment grade credit.

The ESG challenges at the heart of each asset class are complex and diverse, and this series does not pretend to provide an exhaustive overview.

What we offer instead is an assortment – a fixed income ESG medley – in the hope that it will give you a flavour of how we’re tackling the climate question head on.

Sovereigns to default as temperatures rise

The fate of a nation can change a lot during the lifetime of a bond. Particularly when you bring climate change into the equation.

Despite this, no ratings agency has yet announced a climate-related downgrade.

Against this backdrop, we ask three important questions: why are ratings lagging behind; what are the risks; and how are we combatting them at Invesco?

Interrogating sovereign ratings

Emerging markets already being hit disproportionately

A recent report from the Global Climate Risk Index found that eight out of the ten countries most affected by extreme weather events in 2019 belonged to the lower-middle income category.

How, then, should we be looking at emerging market debt? Is it a land of ESG risk or opportunity?

Finding ESG opportunity

Data issues aren’t going away

Industry surveys suggest that issues with data quality and consistency are one of the biggest barriers to ESG adoption.

But, for active investors willing to peer through the smog created by data issues, can these inefficiencies create opportunities?

Peering through the data fog

Understanding labelled bonds: the green, the bad and the ugly

In the run up to the COP26 summit last autumn, Rishi Sunak’s Treasury made headlines by launching the UK’s first ever green gilt.

ESG labelled bonds are a growing market, with some clear benefits. But there are risks too – and we’re monitoring them closely.

Looking beneath the label

Discover (un)fixed income

We know investors are living through an unprecedented period of market disruption and volatility. As we face these new realities, we think taking an unfixed approach to fixed income is an advantage.

From active to passive, from mainstream to innovative, we have the expertise, the strategies and the flexibility needed to match your objectives as markets evolve.

Investment risks

  • The value of investments and any income will fluctuate. This may partly be the result of exchange rate fluctuations. Investors may not get back the full amount invested.

Important information

  • All data is provided as at the dates shown, sourced from Invesco unless otherwise stated.


    This is marketing material and not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.


    Where individuals or the business have expressed opinions, they are based on current market conditions. They may differ from those of other investment professionals. They are subject to change without notice and are not to be construed as investment advice.