NCRAM ESG Policy
Nomura Corporate Research and Asset Management Inc. (NCRAM) has a strong commitment to responsible and sustainable practices in investing client assets entrusted to us. With regard to client investing, we believe that consideration of sustainability is congruent with our Strong Horse investment philosophy. We incorporate Environmental, Social and Governance (ESG) factors when analyzing an issuer’s sustainability and investment prospects. As we evaluate an investment opportunity, we consider whether the company acts in a sustainable way with regard to the environment and with regard to their employees and other constituents. We also weigh their corporate governance with regard to how they treat shareholders and how they treat bondholders. We engage with issuers when we have ESG concerns. We believe that this helps us to invest in stronger companies and improving credits.
NCRAM became a signatory to the United Nations Principles for Responsible Investment (UN PRI) in 2013. NCRAM launched an ESG Global High Yield Strategy in 2018.
Key elements of NCRAM’s ESG process include:
NCRAM has established an ESG Committee consisting of both investment and non-investment personnel, with the NCRAM CIO acting as the Committee Chairman. Committee members interface with industry groups such as UN PRI as well as other Nomura Asset Management companies to discuss industry developments and best practices for implementation of ESG analysis in investing. The ESG Committee also reflects findings back to the broader investment team.
ESG training, led by the CIO and the ESG Committee, is provided to all investment personnel on an annual basis.
NCRAM research includes a summary of an issuer’s strengths and risks with regard to ESG factors in new-issue or other introductory credit reports. Analysis of ESG factors is based on both direct communication with the issuer as well as secondary sources.
NCRAM has engaged Sustainalytics to provide external research on ESG factors.
Analysts and Portfolio Managers (PMs) consider ESG factors in their credit analysis and assess whether the ESG strengths and risks are priced into market yields and spreads.
NCRAM offers its separate account clients the ability to customize portfolios based on exclusion lists and other ESG factors, and offers an ESG Global High Yield strategy.