Credit: We see ESG as one of the largest nodes of business risk for the issuers we monitor, and therefore oit is a significant component of conversations we have with management. We typically engage with companies to get a much clearer understanding of how the company operates and is managed, and to identify how management anticipate and plan for risk. We utilise automated company and industry data to monitor trends. As we represent bondholders, we see governance as critical and use these meetings to discuss concerns and gain a much clearer picture of the business and the organisation. We not only engage to gather information, but company meetings are also an important way of bringing management attention to any concerns. During 2018, Schroders credit analysts held over 800 meetings with debt issuers, either in person or by telephone. Credit analysts also attended meetings jointly with Schroders equity analysts.
In 2018 we used data produced by our Data Insights Until on automated emission data reporting, web based brand perception data, etc to engage on specific performance issues with management. We will also undertake reactive engagement as a result of any negative incident involving a company, in order to understand why it may have occurred, the actions the company is taking as a result, and what the current and future investment risks may be. Often we are able to pick up on an engagement where divestment by our equity teams has led to an engagement going cold, this can be especially helpful when companies are looking to issue new debt.
Engagement with issuers on deal structures has intensified in the last year, notably so in the High Yield space across a number of issuers. In the Aerospace and Communications sectors we were involved in discussing deal structure with sponsors and company management to ensure that deal structure aligned the long-term financing needs of the companies with the long term investment horizons of our portfolios.
For Sovereign Debt a key part of our Emerging Market investment process involved on the ground research trips by Fund Managers in these regions. During these we will engage with policymakers, governments, opposition and NGOs. These are instrumental in delivering insights in what is actually happening on the ground. Occasionally we will raise controversial issues with governments, for example the treatment of foreign labour, where we consider them to be of long term importance. This is to both assess their handling of a situation and to encourage improvement.
Within Securitised, we are focused on if the loan made in accordance with all consumer and other applicable laws and if there are rigorous standards to assure compliance. Specifically, within the private debt space we encourage the loan to be structured accordance with state and local laws via annual state law survey.