Advisory firm MSCI has launched ratings aiming to show investors how exposed countries are to environmental risks.

The MSCI ESG Sovereign Ratings are intended to complement the traditional sovereign debt analysis of a country's creditworthiness, rating 90 countries on a seven point scale from the best, AAA, down to CCC, based on a series of environmental, social, and governance (ESG) performance metrics.

The company is aiming to provide ratings on 99 per cent of sovereign bonds issued in the marketplace, while countries that do not issue securities or whose debt is thinly traded will not be rated.

Investors can also assess countries' performance on specific issues, such as forced labour or whether the country is a party to international conventions related to endangered species, biological diversity, or chemical and biological weapons.

'Integrating ESG into the investment process is the first principle for UN Principles for Responsible Investment (UN PRI) signatories and is increasingly being mandated and scrutinised by asset owners,' said Remy Briand, managing director and global head of index and ESG research at MSCI.

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