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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income
The main strategies used are screening, both initially and ongoing to access companies for investment, and integration in our fundamental research. Thematic is only incorporated as an information tool in our investment style.
We have recently engaged third party screening to assess ESG scores on companies independently. We use these scores to strengthen our internal reseach and understanding on RI issues relating to our investments.
Our internal ESG Committee meets quarterly to audit portfolios regarding ESG issues and ratings. Any concerns are raised directly with the PM.
We only use "themed" bonds if they meet our fundamental investment analysis.
We only invest in thematic bonds if they fit our fundamental analysis. However, should we invest in thematic bonds, we do look for management to report at least once a year formally on RI impacts. We also use management meetings to address any areas of concern.
As a fundamental manager, ESG issues are paramount in our valuation on companies for both fixed income and equities. That is why our teams work together on common issues. We recognize that ESG issues can affect the valuation of bonds and incorporate concerns into our analysis.
Our ESG integration is consistent across all investments. Although certain ESG issues may be a larger focus (i.e. climate matters with respect to infrastructure bonds) for certain types of fixed income, we remain focused on sustainability concerns across industries and individual investments. Collaboration between our equity and fixed income teams re ESG issues is also used.
At the core of our research and modelling of investments is the valuation and risk of an investment. RI issues directly affect the valuation and risk and therefore are directly incorporated in our initial screening of the industry and management, interviews and valuation techniques.