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13-12-2024 · Research

The role of government bond investors in funding the SDGs

Integrating the Sustainable Development Goals (SDGs) into government bond portfolios is a relatively new frontier for investors. Robeco uses its proprietary Country SDG Framework to assess countries on their policies to achieve the SDGs, their need for capital to finance sustainable development, and their adherence to key sustainability principles.

In an update to a research paper first published in February 2023, our quant, fixed income and SDG experts show how such a framework can be practically applied in developed and emerging government bond portfolios. The new and updated parts are:

    Authors

  • Rikkert Scholten - Strategist

    Rikkert Scholten

    Strategist

  • Laurens Swinkels - Head of Quant Strategy

    Laurens Swinkels

    Head of Quant Strategy

  • Jan Anton van Zanten - SDG Strategist

    Jan Anton van Zanten

    SDG Strategist

Summary

  1. A new section on the relationship between CDS spreads and SDG scores

  2. A focus on the four most important government bond benchmark indices

  3. Analysis of historical returns, showing that performances are not significantly affected

Contrary to existing approaches, this method does not lead to government bond portfolios that primarily consist of extremely safe countries with low interest rates that already have achieved many SDG. This approach can therefore enable investors to help close the financing gap for the SDGs.

Read the full report


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