As part of our commitment to the PRI, we introduced a systematic process to assess and measure the environmental, social and governance risks for all the companies under coverage. Please see our response to FI 01.2 and FI 01.3
This approach applies to companies on all of our Approved Lists (money market / investment grade bonds / high yield / SRI) which constitute our active holdings.
Analysis of ESG factors is fundamental to the accurate assessment of a company as well as an evaluation of the risks and the range/magnitude of potential outcomes for a company's bond valuation. By combining both financial and ESG risk analysis, CIBC AM reaches a deeper understanding of the companies in which we invest.
ESG risks manifest in profitability, leverage, cash flow, coverage, reputation, financial policy, competitiveness and event risk.
We assess the potential credit impact on credit rating, default risk, risk of covenant breach, impact on bond spreads, bond liquidity, and the company's access to capital.