When Saudi journalist Jamal Khashoggi was killed in 2018, London-based hedge fund manager Dominic Armstrong bet investors would be turned off and the kingdom's debt would take a beating.related media assets available. Click to see the gallery.LONDON: When Saudi journalist Jamal Khashoggi was killed in 2018, London-based hedge fund manager Dominic Armstrong bet investors would be turned off and the kingdom's debt would take a beating.
Yet the world's largest oil exporter, which has issued about US$80 billion in international bonds since 2016, has an A-minus credit rating and pays higher yields than similarly rated peers, making it hard for investors to stay away. Some of the biggest names in ESG investing, including BlackRock Inc, PIMCO and Ashmore, held a total of nearly US$1 billion of Saudi debt, based on the latest data for 2020. They declined to comment when contacted by Reuters about the impact of the Khashoggi report.
ESG fixed income funds operating across the US$130 trillion debt market have just under US$300 billion under management; by contrast ESG funds across the US$88 trillion global equity realm command nearly US$1 trillion, Morningstar data shows. Brazil's Foreign Minister Ernesto Araujo acknowledged this month that there was illegal deforestation occurring, but said his government was combating it, and that it was open to international cooperation on sustainable investment in the Amazon.
"In terms of risk assessment, the environmental side is sort of the easy part," said Eric Ollom, head of emerging market corporate debt strategy at Citi."The other parts – Social and Governance – get tricky."