Fixed Income - Covering all sub-classes
We note that many ESG and responsible investment initiatives focus on equities. We believe ESG issues are material for fixed income, including for SSA. Therefore, working with our consultant we undertook a specific project having monitoring calls or meetings with all non-passive fixed income managers in the long term fund specifically dedicated to discussing ESG integration and responsible investment. All managers held in this reporting period have gone through this process.
Specific attention was given to reviewing how managers’ approaches differ between SSA and Corporate debt, and how approaches more broadly differ from those of equity managers, in terms of data/scoring, materiality, restrictions, time horizons and engagement. We were encouraged by the focus on ESG and interesting innovations of active managers in the fixed income space.
This was in addition to the other selection and monitoring work incorporating ESG in detail. Fixed Income manager must comply with our RI/ESG principles in the same way as our equity managers. This includes our fossil fuel divestment targets.