About ESG

The term ESG (for Environmental, Social, and Governance) refers to a broad range of qualitative and quantitative considerations that relate to the sustainability of an company. While this broad definition is straightforward on its surface, it implies different things to different people. For an emerging market debt investors - it means extending the quality factor in the risk framework to assess the quasi-sovereign and corporate default risk of emerging market credits. ESG-enhanced framework continues to be statistically significant in gauging credit risk and that the overall goodness of fit of our model and the individual Standalone Credit Quality pillar within our investment process have both moderately improved after integrating ESG more explicitly.