At a major event for the academic and financial communities, three students from the Master’s in Financial Management program at the Graduate School of Business at Universidad ORT Uruguay their theses during the annual conference of the Central Bank of Uruguay (BCU).
Josefina Grezzi holds a degree in Public Accounting and currently works as a freelancer. Claudio Barneche Rey, also a Certified Public Accountant, serves as a Compliance Asset Management Analyst at Pluspetrol. Belén Panario holds a degree in Business Management and currently serves as Head of Finance & Admin at Qualabs.
What is the relationship between ESG performance and sovereign bond spreads in emerging markets?
The research paper presented by the master’s students sought to examine the relationship between ESG (environmental, social, and governance) performance and sovereign bond spreads in emerging markets.
The experts examined how environmental, social, and governance factors influence sovereign bond yields in developing economies, a topic of growing importance in the international financial arena.
The study, which examined a sample of 19 countries between 2005 and 2020, analyzed how ESG factors influence sovereign bond returns in developing economies.
This research is highly relevant given the growing importance of ESG criteria in financial and investment decision-making. The inclusion of these factors can impact not only investment returns but also risk management and the long-term sustainability of emerging markets.
The thesis was presented at the 39th Annual Economics Conference, held on July 25 and 26 at the Central Bank of Uruguay, a long-standing national event in the field.
Tools for Economic Growth
The results showed a significant relationship between ESG performance and sovereign bond spreads, revealing a negative correlation between the two. In other words, better performance on the ESG index reduces the sovereign spread. Among the individual factors, only governance was found to be significant in reducing the spread.
This research could have significant implications for financial strategies in emerging economies.
Josefina Grezzi, CPA
The accountant shared her enthusiasm for this achievement on her LinkedIn profile, highlighting the significance of the findings. “Our goal was to determine whether higher ESG ratings have an impact on reducing a country’s cost of debt.”
“It’s not just about the numbers; it’s about paving the way for long-term stability and economic growth.”
She said that this “is just the beginning”: “I’m excited to continue exploring, learning, and contributing to this critical field.”
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Master's in Financial Management