Sovereign bonds: Give us an E, give us an S… but maybe hold the G
Euromoney Limited, Registered in England & Wales, Company number 15236090
4 Bouverie Street, London, EC4Y 8AX
Copyright © Euromoney Limited 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Sovereign bonds: Give us an E, give us an S… but maybe hold the G

Investors should stop pretending to care about ESG risks.


If their own research is to be believed, the world’s largest asset managers are fully seized of the importance of taking environmental, social and governance (ESG) risks into consideration when investing in sovereign Eurobonds.

Yet time and again, when it comes to the crunch, those same fund managers happily load up with long-term debt from regimes with weak governance and high political risk.

Take two recent bond sales from central and eastern Europe. On June 17, Belarus’s government raised $1.25 billion of funding – most of it with a maturity of more than 10 years – from international investors.

Two days later, the arrest of a leading opposition candidate for August’s presidential elections sparked a wave of protests, which were repressed with characteristic severity. Prices of the newly minted bonds duly plummeted.

Why were global funds happy to invest in the bonds of two notorious post-Soviet basket cases? The answer is the same today as it has been for decades, if not centuries

Buyers of Ukraine’s 12-year bond were luckier.

Gift this article