Environmental, Social, and Governance (ESG)
Our investment management philosophy is based on a strong credit culture and a systematic investment process, focused on preservation of principal and protection against downside risk.
We believe environmental, social, and governance (ESG) issues are an important consideration in the credit research process. ESG analysis can assist in the identification of risks which can significantly impact creditworthiness. Consideration of ESG issues alongside financial measures therefore provides a more complete view of the risk / return characteristics of potential investments.
ESG analysis is consistent with our active approach to investing. In this regard, we believe disciplined application of ESG contributes to management of investment risks and long-term value preservation. Our credit team review information on ESG factors through the fundamental credit analysis process.
ESG issues can affect the risk characteristics of credit markets in multiple ways depending on industry and / or individual company. For example, ESG issues may be more prominent in sectors with a significant carbon footprint, resource extraction industries, and heavy manufacturing industries. ESG factors may also affect industry structure and competitive position, for example, the global transition of electricity production from fossil fuel generation to new energy technologies.