APAC Sovereign Bonds, Macroeconomics and Climate-Transition Risk
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.
Developed markets
Loading chart...
Please wait.
Emerging markets
Loading chart...
Please wait.
How Climate Transition Risk May Impact Sovereign Bond Yields
How might climate transition risk affect government bond portfolio performance? In this paper, we quantified the impact of transition risk on sovereign bond yields using MSCI’s Sovereign Bond Climate Value-at-Risk model.
Government-Bond Yields and Climate-Transition Risk
This interactive plot shows how decarbonization could affect government-bond yields and macroeconomic variables across five major countries.
1 Under 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.', 'This is based on data for all MSCI ACWI Index constituents as of May 15, 2015, and Feb. 1, 2022, respectively.', 'GICS® is the global industry classification standard jointly developed by MSCI and S&P Global Market Intelligence.
The content of this page is for informational purposes only and is intended for institutional professionals with the analytical resources and tools necessary to interpret any performance information. Nothing herein is intended to recommend any product, tool or service. For all references to laws, rules or regulations, please note that the information is provided “as is” and does not constitute legal advice or any binding interpretation. Any approach to comply with regulatory or policy initiatives should be discussed with your own legal counsel and/or the relevant competent authority, as needed.