Unlocking Investment for Sovereign Transition

Investors will increasingly need to engage with and evaluate sovereign transition planning to assess the long-term sustainability of their sovereign asset exposures and unlock economy-wide transition investment opportunities.

Investors will engage both as part of sustainability assessments of sovereign holdings and in wider policy engagement to enable transition of corporate exposures.

Sovereign transition planning is an emerging practice. Sovereigns and their investors increasingly view the need for long term planning for transition, particularly to unlock the investment needed to finance the transition.

Robust transition plans can improve investor confidence in future prosperity and therefore repayment of sovereign bond holdings while contributing to meeting investors sustainability investment preferences.

Investors will need to be conscious of the different capabilities of sovereigns to carry out ambitious transition planning, particularly in EM. Few sovereigns will have developed many of the sovereign transition plan elements laid out in this report, although various countries do demonstrate good practice in certain elements.

This draft report presents the main elements of robust sovereign transition plans, unifying existing guidance.

We want to hear from you. We welcome feedback until August 26th via this form or via email at policy@climatebonds.net.