As institutional investors, our fiduciary responsibility is to act in the best, long-term interest of our clients and deliver risk-adjusted returns that are consistent with their objectives.
We believe that an assessment of the risk factors commonly referred to as Environmental, Social and Governance (ESG) incorporated as part of our fundamental research process is necessary for a complete understanding of the risk and return opportunities of our corporate debt investments.
Meetings with company management teams are a key component of our investment research process. These meetings help us to fully understand the businesses under consideration for investment and create an opportunity for us to engage constructively with management teams on specific concerns, often relating to ESG criteria. The underlying aim that governs our engagement with companies is to participate in stimulating an environment of continual ESG improvement and greater corporate disclosure.
Our commitment to responsible investing led us to become a signatory to the Principles of Responsible Investment (PRI) in 2010.
In addition to this broader, firm-wide process, we have developed dedicated ESG credit strategies that target attractive investment returns and positive impact by investing in companies we think best manage their economic, social and environmental performance.
We have extensive experience investing in debt issued by companies that, upon research, meet our stringent criteria for offering compelling financial risk/reward characteristics, but which are also focused on having robust ESG principles.
Key ESG Risks
We define environmental risk as a company’s environmental impact and the economic implications arising from a mismanagement of such risk.
We define social risk as a company’s interaction with its workforce, stakeholders and with the overall community that supports its operations.
We believe that governance risk is particularly relevant to corporate credit investors as it includes, but is not limited to, a company’s ethical standards, transparency practices and appropriate governance structures to protect the interests of bondholders.