Proprietary research forms the foundation of our approach to ESG integration. With over 60 dedicated research analysts, we have the expertise to make informed, judgmental decisions on the ESG profile of each issuer in which we invest. While we consider ESG data from third-party providers, this is merely a reference point and does not dictate our views.
Even though we do not have voting rights as bond investors, engagement is a key part of our approach to ESG integration. We regularly meet with company management and government officials, pressing them on topical issues and encouraging them to adopt best practices. In addition, we also aim to have a positive influence on the industry by participating in industry forums and regularly consulting with third-party providers with the aim of improving their data. We also collaborate closely with our Investment Stewardship team on firm-wide engagement efforts.
We recognise that our clients have different objectives. Therefore, we see integration as a foundation for a broader sustainable investment platform, which also includes screening, positive tilt and thematic capabilities:
- We manage negatively screened strategies for a variety of clients and a thematic Municipal Debt strategy. In Q4 2019, we also launched an explicitly sustainable flexible global bond which incorporates positive tilt.
- We invest in Green Bonds in traditional portfolios where prospective risk-adjusted return is attractive and have the capability to manage dedicated Green Bond portfolios for thematic investors. We have developed an internal governance process for Green Bond classification which encourages issuers to adopt common standards and improve disclosure practices.
- In all portfolios, we adhere to legally mandated exclusions such as controversial weapons restrictions and US OFAC sanctions-based restrictions.