In general, for fixed income, we consider ESG factors when they have the potential to impact the value of our investment. We examine ESG factors at both the issuer and sector level. We seek to understand each issuer individually and through the lens of local norms and the laws and regulations of the market in which it operates; however, we believe that there are some basic ESG principles that are applicable across all markets. Those include the need for a qualified and effective board that is accountable to shareholders, robust accounting and risk management systems, appropriate policies to address environmental and social risks and opportunities to the business, and policies and controls designed to ensure full compliance with all applicable laws and regulations. Principles applicable to sovereign issuers include appropriate anti-corruption measures and the protection of private property rights.
Our investment teams are at varying stages in integrating ESG into their fixed income investment analysis. All of our teams have access to robust ESG research that is used in the investment decision making process. For example, some teams are currently working on incorporating their ESG analysis more formally into their credit analysis, while others are in the process of building monitoring sheets that link to a third-party ESG research to flag ESG-related issues. Our London sovereign debt team actively compares ESG research against its own analysis of ESG risks relevant to each sovereign issuer. BlueBay's ESG integration includes considering ESG risks at the issuer, sector, portfolio, and group levels.