In selecting and assessing the credit worthiness of corporate and supra borrowers, the sustainability of the business is a key consideration. Strong governance that includes effective management of material ESG factors increases the likelihood that a company will continue to perform and manage risks effectively.
In 2018, QBE continued to iterate ESG integration within Fixed Income and extended it to Supranational issuers also.
The key principles guiding credit selection encompasses developed market corporate, financial and structured debt. Each corporate entity under consideration is subject to an ESG Assessment, including independent external ESG ratings and the Portfolio Manager assessment. Selection and monitoring includes materially negative ESG developments.
The inclusion of the formal ESG Assessment helps to identify companies at risk of poor performance, this improving the risk and return of the investment, and as a debt investor to exert some influence on business operations and improve practices is a key focus for including ESG factors in our investment decisions.
In addition to the above, a thematic approach supports QBE’s commitment to green bonds and social bonds. All issuers are screened subject to QBE Global Sanctions Policy.