For all fixed income investments integrated into our portfolios a due diligence process is carried out ahead of investment. Traditionally this follows the framework of analysis of business risk, financial risk and affiliation risk of the bond issuer. By analyzing publications from Sell-side analysts, rating agencies, independent data sources, corporate publications, new issue presentations, website disclosures and Supranational Risk Assessment bodies such as the Financial Action Task Force we can have a fair view on E, S and G indicators per Corporate (Financial) issuer. With an increasing market sensitivity to ESG risks, this analysis (for example exposure to changes in environmental regulation) is also incorporated in our business risk assessment as well.
It should also be noted that while some investment exclusions or sector weightings are incorporated, this must be balanced against a fiduciary duty to maintain high diversification of the portfolio to reduce any concentrated credit exposure.