APAC Sovereign Bonds, Macroeconomics and Climate-Transition Risk intro
Aug 19, 2022
These interactive charts show how decarbonization could affect government-bond yields and macroeconomic variables across several major Asia-Pacific countries. Our analysis indicates that sovereign-bond investors may need to be aware of “greenflation” risks and resulting higher yields, as countries start to decarbonize.
We used the MSCI Sovereign Bond Climate Value-at-Risk Model to quantify potential impacts on government-bond yield curves (bottom right section of each chart). These results are derived from the macroeconomic modeling from the Network for Greening the Financial System (NGFS) and National Institute Global Econometric Model (NiGEM), which is widely used by central banks and investors globally. We explain our analysis further in our recent research paper.
How to interact with this plot: Click on a climate scenario at the bottom of each chart. Use the clickable legends to select multiple years. Press shift-click to restore multiple scenario plots.
1Under our MSCI ESG Ratings methodology, there are three largest-owner classifications used as the basis for this analysis: (i) controlling, whereby the largest shareholder (or group) holds 30% or more of the voting rights; (ii) principal, where the largest shareholder holds between 10% and 30%; and (iii) widely held, where no shareholder holds more than 10%. Please refer to the Ownership and Control 2022 report or the MSCI ESG Ratings Methodology for further details.
2This is based on data for all MSCI ACWI Index constituents as of May 15, 2015, and Feb. 1, 2022, respectively.
3GICS® is the global industry classification standard jointly developed by MSCI and S&P Global Market Intelligence.