Financial Performance of Government Bond Portfolios Based on Environmental, Social and Governance Criteria

Guillermo Badia, Vicent Pina, Lourdes Torres

2019 | Academic | Fixed Income, Risk & Performance, Sovereigns

Using various financial performance measures, the results suggest that high-rated government bonds, according to environmental, social, and governance (ESG) dimensions, outperform low-ranked bonds under any cut-off, although differences are not statistically significant. These findings suggest that ESG screenings can be used for government bonds without sacrificing financial performance.