Responsible Investing

If building a sustainable bond portfolio sounds tidy and straightforward, it isn’t. The auto industry illustrates the difficulty of finding a perfectly sustainable private sector investment.

Transcript

Larry Bellinger: As impact investors, we certainly start with credit fundamental research. But in addition to that, we overlay this with specifically looking at bonds and how it transforms communities.

Forced labor, debt bondage and human trafficking victimize more than 40 million people worldwide each year.

Heightened demand for responsible investing has led to an explosion in issuance of ESG-labeled bonds such as green bonds, social bonds and sustainability-linked bonds.

ESG ratings are a popular way to search for companies that meet specific criteria in a responsible investing agenda. But third-party ratings don’t tell the whole story for investors seeking a comprehensive view of how ESG issues affect return potential.

Synthetic biology is a revolutionary technology that could make a profound impact on the way a vast array of products are manufactured.

Today’s bond market presents unique opportunities for responsible investing in the form of ESG-labeled bonds. These relative newcomers to the market can give their issuers an ESG halo and even lower their cost of debt.

Investors are strengthening their commitment to help combat climate change. But as inflows to climate-focused funds accelerate, more questions are being asked about the investing approaches of these portfolios.

Transitioning to a net-zero carbon economy is vitally important, and corporate bonds will play a critical role in the transition.

When SFDR’s level 2 requirements take effect, investors should focus on three issues: ESG research is integrated in investment processes, what engagement activity is conducted with issuers and whether a methodology is applied to classify portfolios.