Jupiter’s thematic environmental fixed income strategy is managed with a collaborative approach, bringing together the expertise of Jupiter’s environment and sustainability equities and fixed income and multi-asset teams. We analyse how an entity’s business risk profile and earnings are likely to evolve over time and consider the impact on the various stakeholders involved. Careful consideration of a company’s entire capital structure and the relative value of those securities is central to the process in order to determine where the best risk-adjusted returns can be found between its bonds and equity. This approach helps us to determine the right balance of securities to help mitigate downside risk for our investors while providing our clients with exposure to long-term environmental and sustainable solutions themes.

We continue to strengthen our Green Bond and Sustainability Bond Criteria. Last year we explicitly incorporated a “Do No Harm” component to the credit review process for labelled bonds whereby the full operations of the organisation (not just the labelled projects) are reviewed for potentially harmful activities. In addition, we expect our criteria to develop in line with those speicified under the EU Taxonomy in 2020.

Instances in which an issuer has not disbursed bond proceeds as initially described have not so far occurred in our portfolio to date. As stated above, we seek green bonds from organisations with robust environmental sustainability strategies which are directly linked into a green bond framework, providing a clear pathway to achieving those objectives through additional projects in future. Should such an event occur in the portfolio, our initial approach would be to engage with the issuer to raise the issue and verify the situation. Should we receive an unsatisfactory response from the issuer we would seek to escalate the engagement, this could entail a variety of approaches including collective engagement with other bondholders, going public with our concerns or appealing to regulatory or market standard setting bodies. Our final option should we be unable to satisfactory resolve the situation would be to divest from the security. We would also disclose details of such an engagement and our decision making to clients in the interests of transparency.