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ESG Our approach to monitoring ESG issues in sovereign debt research

Claire Zeigler Neha Mohanty

25 May 2026

KEY TAKEAWAYS

  • We believe that considering potentially material environmental, social and governance (ESG) issues in sovereign debt investment research is an important part of assessing the ability of a government to repay bond investors. 
  • Our recent review found a significant relationship between emerging market (EM) sovereign debt spreads and the metrics used in our sovereign monitoring framework.
  • We also conducted backtests on additional datasets – including sovereign emissions and transition targets data. We found that these metrics are not currently priced in EM sovereign debt spreads. 
  • Although these metrics do not appear to be currently priced in and are not covered by our sovereign ESG monitoring framework at this time, we believe their relationship with EM spreads could evolve over time. We have therefore incorporated sovereign emissions and access to ASCOR’s transition data into our proprietary EM Live platform to enable closer tracking.

Monitoring for material ESG risks

Explore how we complement our investment research with a proprietary approach to sovereign monitoring.

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Claire Zeigler is an ESG integration lead for fixed income at Capital Group. She has 17 years of industry experience (as of 12/31/2025). She holds an MBA from UCLA Anderson School of Management and a bachelor's degree in economics from University of Southern California.

Neha Mohanty is an ESG analyst at Capital Group with six years of industry experience (as of 12/31/2025). She holds a bachelor's degree in economics from the University College London. She also holds the Chartered Financial Analyst designation.

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