More and more assets are being judged on the financial markets according to the criteria of the environment, social development and good corporate governance.

They also affect the creditworthiness of debtors if, for example, a loan-financed house is threatened by flooding.

The credit ratings of the states are also more strongly influenced by the sustainability factors, which are abbreviated as ESG in the financial markets according to the English terms for environment, social and corporate governance.

Markus Frühauf

Editor in business.

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In a study presented to the FAZ, the European rating agency Scope examined the ratings of the countries according to ESG opportunities and risks. The African countries are the big surprise because they are the only ESG winners. The authors of the Scope study see the big plus of Africa in demographics, i.e. in the young population. The credit checkers, however, assume that the governments in the African countries solve the problems of unemployment and social inequality. The abundant rainforests on the African continent can absorb CO2 emissions, which, according to Scope, gives the states revenue opportunities in emissions trading.

But behind the opportunities lies the big question mark of political reforms and institutional stability.

After all, some African countries would be threatened to a high degree by natural disasters.

The rating agency does not rate the ESG prospects in South America as good, but the region comes in second best.

Here, too, the young population offers growth opportunities, which can, however, be slowed down by management risks.

Old population in the euro area

In the euro countries, Scope does not recognize any negative factors for the creditworthiness in terms of the environment and stable management. But this can be weakened by the aging population. The reduced supply of labor affects growth prospects and, in the long term, public finances. High emissions and older populations are the greatest risks for Anglo-Saxon countries, including the USA and Great Britain, but less acute than in the euro area.

Central and Eastern Europe does poorly. In the opinion of the Scope analysts, improvements in social cohesion and productivity are crucial in order to be able to secure macroeconomic stability and sustainability against the background of unfavorable demographics and possible shortages of qualified workers. Advances in education and health care are required to make labor markets attractive. In the long term, the Eastern European EU states would have to reduce CO2 emissions in their economies, which Scope regards as challenging due to the importance of coal energy.

The analysts see the greatest ESG challenges in the countries of the Middle East. This is mainly due to the high CO2 emissions in relation to economic output. In addition, there would be the low capacities of the nature there, which is mainly dominated by deserts. After all, Scope also sees management risks in the geopolitically uncertain region.