Companies are assessed using the Calvert Research System (CRS), which is their proprietary platform that is optimally engineered to capture multiple sources of ESG data and evaluate this information through the perspectives of Calvert’s analysts' deep ESG expertise. Calvert applies a streamlined investment decision-making process that integrates both financial and sustainability insights and compares companies across these metrics. Calvert’s team of ESG research analysts leads this process and works closely with fixed income analysts to identify the most material ESG factors and data indicators.
EVM”s Investment Grade Fixed Income team collaborates with Calvert’s ESG research analysts to review how ESG themes/metrics are specifically relevant to a company given its sector and would affect the credit drivers of spread performance. The ESG research analysts examine ESG themes and related metrics that span across governance and ethics, environment, workplace, product safety, human rights, Indigenous People's rights, and community relations, depending on the sector, and assess their potential impact on a company's credit profile and ultimately to its valuation.
The Calvert Green Bond Fund seeks to invest in companies and other enterprises that demonstrate positive ESG performances as it addresses sustainability challenges that are primarily "green" investments. These include securities of companies that develop or provide products or services that address environmental solutions and/or demonstrate leadership in their efforts to reduce their own environmental footprint; bonds that support environmental projects; structured securities that are collateralized by assets supporting environmental themes; and securities that, in the opinion of the Fund's Adviser, have no more than a negligible direct environmental impact, which may include securities issued by the U.S. Government or its agencies, and U.S. Government-sponsored entities. In order to manage this fund effectively, ESG review, integration and thematic strategies are all incorporated.
The Calvert Absolute Return Bond Fund falls into the popular "go anywhere" non-traditional bond fund category. Unconstrained funds are not typically managed against a benchmark index, but rather strategically and tactically re-allocate to be best positioned in changing markets. This is the only mutual fund in the non-traditional bond category to feature the incorporation of environmental, social and governance (ESG) analysis in its investment process.
Additionally, Calvert has worked with academic partners on understanding how ESG and event risks are tied to credit risks, and are forming additional academic partnerships to build on their understanding around financially material ESG issues in the public debt space.