CCM’s fixed income strategies invest in high quality, well-researched bonds where we have confidence that the use of the proceeds will have positive societal impacts. Each of the bonds that we select for a portfolio must meet our stringent impact and financial criteria. Our impact criteria includes:
Use of Proceeds: The use of proceeds must positively impact a community in one or more ways and align with one or more of our 18 impact themes..
Transparency: Our proprietary approach, whereby we have visibility into the use of bond proceeds, allows us to better understand the financed programs and have confidence in their expected positive environmental and social outcomes.
Reporting: We must be able to quantify and report on the expected impact and/or detail the qualitative benefits of each investment. Quantitative data can include the number of jobs created or the number of affordable housing units created as well as dollar amounts invested in impact themes. Qualitative research is the “story,” so to speak, which includes detailed explanations of what the security is financing. We report to clients on the positive impact outcomes of their investments and offer institutional clients the opportunity to customize their fixed income portfolios by geographies or impact themes.
Similar to our approach in fixed income, we evaluate equity securities from an impact and financial perspective. CCM supplements its in-house research with third-party data to determine where potential holdings fall in the following four categories:
Strong Positive Impact: companies that we believe are significant contributors to society such as those that generate more than 50 percent of their revenue from a product or service that aligns with one ore more of our 18 impact themes.
Moderate Positive Impact: companies which have characteristics that align with one or more of our 18 impact themes and that we believe are a net benefit to society.
Neutral Impact: companies that do not fall within the two categories above but where there exists the potential to be included in the two categories in the future.
Negative Impact: companies with excessive ESG-related risk such as fossil fuel exploration and production or any activity related to coal, tobacco, weapons, and prison management, among others. These securities are not eligible for investment.
For investment strategies that include both fixed income and equity investments in a single portfolio, we apply the same respective tools and techniques mentioned above to each investment when measuring, monitoring, and tracking impact and ESG metrics and outcomes.