Railpen’s response to the ASCOR project on climate-related framework indicators and assessments

We invest, on behalf of our members, in sovereigns, and need access to transparent and comparable reporting to manage climate-related risks and opportunities and assess the alignment potential of their holdings. We are strongly supportive of the measures proposed.

However, with sovereigns, the absence of any disclosure requirements currently makes it
incumbent upon the users to aggregate available climate data and update this through
ongoing engagement. This can serve to establish a standardised template for sovereign
climate data and over time, improve disclosure quality.

Railpen requests that ASCOR consider the below recommendations to ensure the framework
of indicators and country assessments are optimal for investors and issuers:

• Guidance on incorporating country by country considerations through aggregation and disclosure of the current low carbon transition profile of the country, as a foundation to sovereign assessments.
• We recommend that ASCOR use a four pillar process instead of three, with the first and most crucial pillar being the disclosure of a standardised snapshot of a country’s current low carbon transition
  profile and risks.
• Historical emissions trends are very useful but need to be viewed in context with a country’s physical risks, energy mix and availability, reliance on the same for economic growth and employment, all of
  which together need to be factored in to drive a just transition.
• We recommend a review of sovereign activities on climate action reducing emissions from deforestation and forest degradation UNEP REDD+ as a reference, which is a climate change mitigation solution developed by Parties to the United Nations Framework Convention on Climate Change (UNFCCC)

We see the potential for the ASCOR framework indicators to be adopted for a variety of
innovative applications, including being adopted by issuing countries as key performance
indicators for sustainability-linked sovereign bonds.