LEADERS UNIVERSE SUSTAINABLE FIXED INCOME

Back in the 1990s, Robeco was one of the first asset managers to see the potential of sustainability as a way of enhancing investment returns for our clients. With this principal aim in mind, we integrate environmental, social and governance ( ESG) information gained from leading sustainability research into our investment processes, and actively engage with the companies in our portfolios.

At Robeco we see sustainability as a long-term force for change in markets, countries and companies. This means it can have an important impact on future performance. So in our investment processes, we treat sustainability just like any other value driver, such as company financials or market momentum. We are convinced that this leads to better-informed investment decisions.

We have access to research from leading sustainability specialists, such as our sister company, RobecoSAM. We are particularly interested in materiality: which ESG elements impact companies’ financial performance and which don’t. This enables us to focus on the information that is most relevant to our investment performance. After all, our aim is first and foremost to achieve good investment returns for our clients. At Robeco, we regularly publish articles, white papers, engagement case studies and academic research on sustainability.

A dedicated team of engagement specialists maintains an active dialogue with some 200 companies a year on financially material themes that we identify in consultation with our investors. This has proven to be a successful means of influencing corporate behavior. They also vote at around 5,000 shareholder annual general meetings. All Robeco’s activities are in line with the Principles for Responsible Investing (PRI), which require asset managers to be active owners and incorporate ESG factors into their ownership policies and practices

ESG integration is an ongoing strategic effort, and investment teams will vary in their level of ESG integration. We are presently working to apply these principles into all of Invesco’s assets under management. As noted earlier, there is little value in providing pre-packaged, one-size-fits-all strategies to ESG-focused investors. All are different, with differing time horizons, levels of risk tolerance, return expectations and commitment. Invesco has the depth of products and, combined with a deeply consultative approach, we believe is uniquely positioned to seek to deliver purposeful outcomes for nearly any investment objective.

ESG investing is a fundamental commitment at Invesco. We’re a trusted partner to our clients, both on ESG product strategies and as part of our mission to deliver an investment experience that helps people get more out of life. We adopt and implement ESG principles to align with our fiduciary responsibilities and have strengthened our position through industry advocacy, leadership and innovation.

The starting point for our company-level ESG research is the analysts and fund managers, who will look at a variety of factors. These will differ per asset class, sector, geography and company and will typically be one component of an overall investment view. Based on this initial view, where the fund managers and analysts wish for more detailed ESG information, our Global ESG team can provide proprietary analysis. Crucially, while there is global, centralized support, decisions are ultimately made by our investment managers and analysts – the individuals who know their asset classes and sectors best.

While our first socially responsible investment product was launched over 30 years ago, we became a signatory of the UN-backed Principles for Responsible Investment in 2013 and have since achieved an A+ in Strategy and Governance for three consecutive years. This rating demonstrates our extensive efforts in ESG integration, active ownership, investor collaboration and transparency. We’re also disclosers to and investor member of the Carbon Disclosure Project, and in 2019 we became supporters of the Task Force for Climate-related Financial Disclosure (TCFD) with our inaugural Climate Change report published in Q2 2020.

Responsible Investing (RI) lies at the heart of NN IP’s investment beliefs. It is key to enhancing risk-adjusted returns while contributing to society as a whole. ESG factors are integrated into the investment process for all of our fixed-income strategies enabling us to consider factors which have a significant impact on long-term performance. Material ESG risks and opportunities are integrated into the fundamental analyses of companies and sectors, as well as into portfolio construction. Our materiality framework identifies these factors for each sector and the results of this analysis are added to the company scorecards. ESG considerations are very relevant for our relative value discussions.

Furthermore, we have been managing dedicated sustainable credit portfolios for well over a decade. These portfolios apply positive selection criteria and a stricter view on controversies in their investment approach. They have shown consistent outperformance throughout market cycles, outperforming its traditional counterparts as the impact of the coronavirus hit markets.

Our impact range includes the Green Bond strategy which invests in projects making a measurable positive contribution to the UN SDGs, particularly climate change mitigation and adaptation. This strategy is a market leader both from a volume and performance perspective, with a diversified offering including short-duration, corporate bond and blended variants.

Engagement forms an important part of our responsible investing approach. This includes controversy and thematic engagement led by the centralized RI team, as well as investment dialogues carried out by portfolio managers and analysts.

Sustainability is our lens for the viability of our investments. Thus, we believe

• that long-term thinking is the main condition for real and lasting economic success
• in investing in businesses that provide the right solutions for the future, while avoiding companies that fail to address future challenges
• that incorporating a sustainability mind-set at all times increases the quality of our analysis and raises the level of our insights
• that integrating all aspects of sustainability into the investment process leads to better outcomes by reducing risks and harnessing long-term opportunities.

The ESG analysis of companies is based on a proprietary assessment methodology developed by the Sustainable Investment Research team of the Bank. All ratings are conducted by in-house sustainability analysts (using aggregated sustainability data from renowned third-party providers). The sustainability rating incorporates two dimensions, which are combined in the Sarasin Sustainability-Matrix®: a Sector Rating (comparative assessment of industries based upon their impacts on environment and society) and a Company Rating (comparative assessment of companies within their industry based upon their performance in managing their ESG risks and opportunities). Only companies with a sufficiently high combined rating qualify for the Bank’s sustainability funds.

Over the last 30 years, we have built a comprehensive responsible investment approach consisting of three pillars:

• ESG integration
  Incorporating financially material ESG factors into the investment decision-making process to help mitigate risk and potentially uncover opportunities.
• Active ownership
  Addressing ESG issues by actively engaging with issuers and investee companies and exercising shareholder rights.
• Solutions
  Providing focused responsible investment strategies including exclusions, best-in-class ESG, sustainability-themed and impact investments.

 Our research framework:

ESG factors are systematically integrated into our bottom-up research process for fixed income and equity issuers. We aim to develop our own holistic house view of issuers’ ESG profiles. By integrating ESG considerations with economic factors, and drawing from specialized ESG research sources, the research teams seek to identify financially material ESG factors and arrive at an independent, comprehensive view of the investment.

We seek to answer three key questions:

• What are the potential economic impact of the ESG issue and its associated effect on the issuer’s long-term growth potential, profitability or creditworthiness?
• Are ESG risks and opportunities accurately reflected in valuations?
• Is engagement beneficial to generate long-term economic value?

We view ESG analysis as a risk management tool and a potential alpha source. By integrating ESG factors into the traditional financial analysis framework, we aim to identify financially material factors which could affect the issuer’s long-term growth potential, profitability, or creditworthiness, and to assess if they are appropriately priced.

Our ESG integration process focuses on managing financial risks and identifying opportunities by including additional information in investment analysis to help inform our decision making. ESG integration does not seek to make ethical judgements and imposes no ESG-related restrictions on the investment universe. It seeks to systematically uncover ESG risks and opportunities to ensure they are appropriately priced in the investment being considered.

For further details please download our Responsible Investment Report 2020 here.

We recognize that environmental, social, and governance (ESG) issues may create both opportunities and risks for our clients’ portfolios. We address ESG factors through our investment process to better understand their potential impact on current asset values and future performance. Throughout our decades of experience managing equity, fixed income, multi-asset, and alternative investment portfolios, we have followed these processes.

By integrating ESG factors into our investment process, we are able to better fulfil our mission of partnering with clients to achieve their specific investment objectives.

We believe that business models that improve upon their sustainability create value for society and investors in those businesses. Moreover, as active managers, we are able to advocate for, and hasten, change in the select companies we invest in. To achieve this, we take an analytical approach that considers how companies seek to improve upon ESG issues. Our approach considers ESG factors from both an investment return and risk mitigation perspective over the medium to long term.

Learn more about our integrated approach across our investment platform.

PineBridge is a signatory of the Principles for Responsible Investment (PRI), which provides a framework for reporting and assessing ESG factors.

We view the PRI as an additional tool to help us pursue our primary objective as an asset manager: to improve and preserve our clients’ financial interests across our global investment platform by optimizing economic returns for a given level of risk.

PineBridge has been awarded an A+ score for our strategy and governance efforts in the most recent UN Principles for Responsible Investment (PRI) assessment.

As the asset manager within the German co-operative financial services network, responsibility has been an integral part of the way we carry out our business since our foundation in 1956. We launched our first portfolio formally incorporating sustainability criteria in 1990 and our Assets under Management in sustainable portfolios have grown to over EUR 53 bn since then, making us one of the largest sustainable asset managers in Europe.

We see it as our duty to play an active role in the transition to a more sustainable economy and society which includes the preservation of our natural resources. Furthermore, we firmly believe that sustainability goes hand in hand with economic value added over the long-term.

Accordingly, we take ESG risks and opportunities into account alongside financial parameters throughout all of our investment processes and encourage companies to take a responsible approach to business in the context of our engagement dialogues.

Due to the complexity of sustainable investment, our ESG incorporation entails a thorough analysis of available data and information performed jointly by our fundamental portfolio managers and our 15 dedicated ESG analysts with the help of our proprietary ESG research tool SIRIS (“Sustainable Investment Research and Information System”).

Our approach to responsible investment is guided by leading national and international standards, in particular the UN Global Compact, the UN Principles of Responsible Investment (PRI) and the German Investment Fund Association (BVI)’s Code of Conduct.

We generally do not invest in companies involved in the manufacture of outlawed weapons or coal mining. Furthermore, we may exclude issuers from our investment universe if, for example, an issuer is in serious breach of the UN Global Compact.

Beyond these ESG principles, we honour the individual ethical beliefs of our clients and therefore offer ESG strategies customised to their requirements.

Last but not least, we have incorporated sustainability into the way we carry out our own business.

Visit www.union-investment.com/sustainable_investments for more information including ESG videos.

An entrepreneurial project born within Natixis, Mirova became a full-fledged management company in 2014, affiliated with Natixis Investment Managers. Since the beginning, Mirova has had an ambitious project in mind: to develop investment solutions for its institutional and individual clients aimed at accelerating the transformation of the economy towards a sustainable model. Our cross-asset class and cross-client approach reflect our belief that sustainable investment can be applied to any form of investment choice and should be accessible to all investors.

In 2020, we embarked on a new stage in this collective project and adopted a two-pronged approach: becoming a Société à Mission (‘mission-led company’) and obtaining the BCorp certification. Becoming a mission-led company meant formalising, in our articles of association, our commitments regarding the purpose of our profession as asset managers: to play a role that goes beyond mere economic and financial responsibility. We are committed to a profound transformation of the economy towards a fairer and more sustainable model, both in our business and in our internal practices.

The B Corp certification provides us with benchmarks relating to our strengths and areas for progress, as part of a continuous improvement process.
These changes come with a dual obligation: to be demanding of ourselves and to set an example for all our stakeholders, whether they be our customers, suppliers, partners, the companies and projects we finance, our ecosystem, our employees or our shareholders.

Our proprietary ESG methodology and philosophy are detailed on our website: www.mirova.com

Aristotle Credit Partners, LLC (Aristotle Credit) specializes in ESG-integrated corporate credit investing.  We believe that integrating ESG factors into our investment analysis, engagement, and impact monitoring practices can positively influence corporate sustainability while enhancing our credit selection process and risk-adjusted performance.

The team is led by two Portfolio Managers Doug Lopez, CFA and Terry Reidt, CFA, who have been managing ESG credit strategies together since 1995 at their prior firm.

We invest in companies we deem to have positive practices for the advancement of ESG factors within their organizations and industries. Our ESG analysis also seeks to minimize exposure to companies whose ESG characteristics may be harmful to underlying creditworthiness and stakeholder interests.  Through our stewardship and engagement activities, we seek to broadly improve corporate ESG disclosure and performance.

 ESG factors are integrated into our fundamental credit research process to select credits that meet our investment objectives while providing the greatest positive ESG impact on the portfolio.  We focus on investing in companies that we believe provide transparency on material ESG data, possess higher ESG scores relative to their peers and show the propensity to improve ESG disclosure and scores.  By investing in this manner, we are encouraging ESG best practices within our investable universe.

We believe engaging in dialogue with companies on their ESG practices  provides important insights and can further improve returns.  As a source of liquidity and capital to companies, in our opinion, we are uniquely positioned to communicate the importance investors place on their sustainability practices.  To maximize the impact of our ESG engagement activity, we directly engage management teams on ESG issues while also participating in an investor engagement pool managed by a third-party service provider.

Aristotle Credit has been a proud PRI Signatory since 2015. Visit Aristotle Credit for more information and to watch our ESG Rating Video.

We believe that the privilege of investing our clients’ capital carries with it a responsibility to try to secure a sustainable future. We aim to help our clients make a positive difference to people and the planet while delivering long-term investment returns. We do so through a robust and comprehensive integration of sustainability considerations into our investment platforms.

With our roots in Africa, we know that well-directed investment can transform lives for the better. For over a decade, we have been investing in economic development in Africa, mobilising finance to bring health and prosperity to some of the continent’s poorest communities. We also care deeply about preserving the natural world. As well as investing sustainably, we support initiatives to conserve wildlife.

Our commitment to sustainability extends beyond integrating it into the way we invest. We also aim to act sustainably in our engagement with clients, communities and other stakeholders — and in the way we inhabit our own environment.

Our investment platform incorporates environmental, social and governance factors as we believe this should enhance long-term performance. By incorporating ESG factors, our strategies consider the full spectrum of risks and opportunities associated with an investment. We believe strongly in the power of engagement to effect positive change.

We are committed to pushing the frontiers of sustainable investing, striving to improve our ability to assess ESG impacts on portfolio holdings and their potential to influence returns. For example, in 2019 WWF and Ninety One joined forces to assess the use of geo-spatial research to measure environmental risk in sovereign debt portfolios – something which later saw the release of our Climate & Nature Sovereign Index – both facilitating engagement with governments to encourage fiscal agendas that serve people and the planet.

Please find further information about Ninety One on our website, www.ninetyone.com

At Aberdeen Standard Investments (ASI), our vision is to invest for a better future. We want to make a difference for our clients, society and the wider world – while also delivering financial returns. Environmental, social and governance (ESG) considerations have been an integral part of our decision-making process for almost 30 years. By putting ESG factors at the heart of our investment process, we believe we can generate better outcomes for our clients. The impact of Covid-19 makes this goal even more important. Now, more than ever, we need to work together for a more sustainable future. Responsible investing is about delivering value for clients. Our approach falls into two areas. At the investment stage, we use ESG factors to help decide where best to invest. We integrate ESG into our research, analysis and decision-making processes. We also manage specialised funds that incorporate stronger sustainability or ethical principles. Active ownership is how we look after these investments. As shareholders, we vote in a considered manner and work with companies to drive positive change. We also engage with policymakers on ESG and stewardship matters. It starts with us. As a company, we focus on key societal and environmental issues that matter to our stakeholders, and on which we can have a positive impact. Operationally, that means reducing our emissions and providing fair and inclusive work.

As a wealth- and asset manager, Vontobel believes that the consideration of sustainability aspects in the field of investing is an essential part of a comprehensive sustainability strategy. The signing of the Principles for Responsible Investment (PRI) by Vontobel at the start of 2010 represents an important milestone in this context. By becoming a signatory to the Principles for Responsible Investment, Vontobel signalled its ambition to position itself as a global wealth and asset manager that offers sustainable solutions as a key part of its product range and whose approach to business is characterized by foresight and ownership.

As an active multi-boutique asset manager, each boutique tailors its investment and ESG approach depending on the strategy and the requirements of the asset classes in which it invests. We manage a variety of investment strategies, where ESG forms an integral part of the investment process applied by each investment boutique. Typically, in these strategies:

• ESG analysis is an integrated part of the investment process.
• We exercise voting rights and engage with companies in order to improve their business practices. We believe this will help generate better long-term results.

Overall, more than 30 investment professionals are responsible for our ESG investment strategies in research, investment management and other functions. The ESG Center supports the boutiques’ portfolio management teams in developing and implementing their specific sustainable investment strategy.

More details on our ESG approach on our website.

Calvert Research and Management (Calvert) is a leader in ESG and traces its roots to Calvert Investment Management which was formed in 1976 and was a founding signatory to the UN PRI in 2006. Calvert launched its first responsible investment strategy in 1982 that divested from companies doing business in apartheid-era South Africa. Calvert is a signatory to multiple ESG initiatives and notably, the Calvert Women’s Principles were also adopted as the UN Women’s Empowerment Principles.

Calvert’s philosophy is to invest in companies that demonstrate positive environmental, social and governance (ESG) performance as we address corporate responsibility and sustainability challenges. Calvert believes that there are long-term societal and financial benefits to an investment philosophy that attaches material weight to these factors.

Our in-house ESG research team are guided by the proprietary Calvert Principles towards the goal of earning competitive investment returns for clients while influencing progress and creating a positive impact on society. Research focuses on identifying the financially material ESG risks to which issuers are exposed, evaluating management teams’ ability to navigate those risks, and recognising opportunities for companies to improve their ESG performance.  Analysts parse thousands of ever-evolving data points to differentiate issuers based on financially material ESG issues, informing both our investment decisions and our corporate engagement efforts.

Calvert has a long history of advocacy and engagement. Engagement at Calvert consists of direct dialogue with company leadership, proxy voting, filing shareholder resolutions, working with other investors in multi-stakeholder engagements, and working with legislative and regulatory authorities. We believe that making improvements on material ESG issues may not only promote positive change, but also drive shareholder value.

Calvert was launched as an affiliate manager of Eaton Vance Corp. at the end of 2016.

Founded in 1924, MFS is a global, active investment manager guided by a single purpose: to create value by allocating capital responsibly for clients. Through a powerful investment platform, MFS combines collective expertise, thoughtful risk management and long-term discipline to uncover what we believe are the best investment opportunities in the market.

At MFS, the term sustainable investing encompasses our ESG integration processes, proxy voting activity and issuer engagements. We believe that owning and engaging with companies to improve their ESG performance can sometimes be a more effective path to positive outcomes for all stakeholders than exclusion and divestment.

Our investment teams rely on deep fundamental research and a long-term perspective to select securities that can produce sustainable returns throughout an economic cycle. Although our overall approach to investing has always been well aligned with a sustainability-oriented mindset, in 2009 we formed the MFS Responsible Investing Committee to ensure that financially material ESG topics were being systematically integrated into our equity and fixed income investment processes. We believe collaboration results in better insights, which is why our investment team has always been integrated across asset classes. As a result of that long-held belief, our ESG analysts are expected to drive collaboration on sustainability-related topics, not create an internal ESG outsourcing group. For us, integration means each of our analysts and portfolio managers are considering these topics throughout the entire investment decision-making process.

Visit www.mfs.com/sustainability for more information including ESG videos and thought leadership.

LGT Capital Partners is a leading alternative investment specialist with over USD 60 billion in assets under management and more than 550 institutional clients in 39 countries. Headquartered in Pfaeffikon (SZ), Switzerland, the firm has offices in New York, Dublin, London, Paris, Vaduz, Dubai, Beijing, Hong Kong, Tokyo and Sydney. An international team of over 550 professionals is responsible for managing a wide range of investment programs focusing on private markets, liquid alternatives and multi-asset class solutions. Since 2003, LGT Capital Partners has been encouraging the integration of ESG in its offering and its promotion in the financial industry. In 2008, the firm was one of the first signatories of the UN PRI. Moreover, since 2018 LGT Capital Partners engages with PRI as a member of its Board. Our sustainable approach forms a key part of our corporate culture and is clearly reflected in our investment activities.

LGT Capital Partners has for a long time adopted a sustainable investment approach. We integrate principles of sustainability into a variety of asset classes and investment structures. Consideration of ESG (environmental, social and governance) factors are applied in the area of alternative investments, equities and bonds, fund of funds solutions and direct investment solutions based on a process tailored to the asset class.

In terms of investment products, our global investment universe excludes companies involved in the production, storage and supply of controversial weapons such as nuclear weapons, land mines, cluster bombs/munitions and biological and chemical weapons as well as companies involved in thermal coal production and power generation from thermal coal.

ESG Report 2020

For what is already the eighth time, the annual ESG Report from LGT Capital Partners shows how LGT’s portfolio managers incorporate sustainability factors into their investment processes.

Read the entire ESG Report 2020 (PDF) online.

We have an integrated approach to responsible investment and ESG research that is embedded within our investment approach, and is supported by our culture of collaboration, sharing of research and ideas, and robust debate. In developing our understanding of a business we take into account its approach to managing environmental, social and governance issues, as well as any controversies that may have arisen.

In 2018 we launched a proprietary and innovative responsible investment (RI) ratings system that combines an assessment of a company’s financial stewardship with an analysis of how well it manages its material ESG risks (using the SASB framework). Combining both aspects into a single, forward-looking company rating from 1 ( strong) to 5 (weak), reflects our conviction that prudent management of financial and ESG factors is important to a company’s ability to create long-term, sustainable value. Utilising data science and cloud computing, the RI analytics and ratings add to our fundamental research, providing our global investment teams with a more robust and evidence based RI capability, with coverage across 5,500 global listed equities.