At UBS-AM we believe that using Environmental, Social and Governance ("ESG") factors, or material, extra-financial data, in the investment analysis process improves the quality of the investment decisions. Incorporating these factors helps investors take a more comprehensive view of the potential risks of their investments.
Implementation of ESG integration across the UBS AM fixed income platform is grounded on the collaboration between our credit analysts and our Sustainable and Impact Investing team. We have established protocols which guide how we address issuers which we cover, how to make use of external ESG ratings information, and how to address gaps in coverage. Our credit analysts are responsible for the ESG analysis of issuers within their coverage, supported by UBS AM's sustainability investment research team. Through these dialogues, we are able to address questions about the materiality of an issue, the quality of an issuer's management of its risks, and how to balance different levels of materiality or the timing of how ESG issues are expected to develop. We use various data sources to gather information, including external ESG ratings providers, to inform our analysis of individual issuers and to help us with cross-sectoral and peer comparisons.
Moreover, our credit analyst recommendations are centrally stored and shared with portfolio managers globally, and analyst credit recommendations are discussed in regularly scheduled credit committee meetings, in which individual cases are discussed in a centralized manner with portfolio managers globally. ESG recommendations are included as part of the credit analysts' credit research and are also subject to the considerations of and discussions with Sustainable and Impact Investing team representatives.
By providing integrated recommendations that consider ESG risks and opportunities, UBS-AM avoids portfolio managers being forced to choose between the sustainability and the financial attractiveness of companies when making their stock selections, given that ESG considerations are taken into account in the research recommendations.