ESG factors and sovereign debt

Abstract

We analyse how political stability, an ageing population and climate change affect Italy's ability to manage its public debt. These three factors, which fall within the Environmental, Social, and Governance (ESG) scope, pose specifc challenges for our country that require careful and strategic management. The paper examines three policy briefs to show how Italy addresses these issues. It highlights that improving political stability can help Italy manage its debt better. It also points out the need to deal with an ageing population's economic effects and take action against climate change to support economic growth. The findings stress the importance of including ESG factors in debt management and other lessons for other countries facing similar challenges.