We consider Environmental, Social, and Governance factors during our credit review process and believe issuers that exhibit elevated/lowered levels of key ESG risks have more/less volatile credit spreads and have a greater/lesser potential for negative credit events. Our integrated approach is applied to all new credits and existing holdings such that ESG considerations are evaluated concurrent with traditional credit analysis such that it is a holistic risk assessment.
Environmental, Social, and Governance factors are broken down into 10 key themes. Those key themes are further segmented into 32 key issues. Our Analysts identify which key issues are most relevant for each sector they cover. Key metrics are then mapped for the aforementioned key issues at the sub-sector level. Key metrics are used to benchmark credits against their peers.