The PRI discusses with representatives from CRAs (Moody’s Investors Service and S&P Global Ratings), investors (Barings and PIMCO) and a bond issuer (NRG) the challenges of ESG in credit risk during a panel session at the San Francisco conference on Responsible Investment in Fixed Income this January.
This report focuses on the current state of ESG integration in the Americas, with reports for EMEA and APAC are scheduled to be released in March 2019.
Portfolio managers and analysts are increasingly incorporating ESG factors into their investment analyses and processes. However, ESG integration remains in its relative infancy, with investors and analysts calling for more guidance on exactly “how” they can “do ESG” and integrate ESG data into
Climate (or climate-aligned) bonds refer to labelled and unlabelled bonds for which proceeds are intended to finance projects and activities that contribute to a low-carbon and climate-resilient economy. Green bonds refers to explicitly labelled bonds for which the proceeds will be exclusively used
Issuer engagement on ESG factors is becoming increasingly commonplace. Investors are starting to formalise their engagement as an integral part of their approaches to responsible investment.
Principle 5 of the six Principles encourages collaboration by investors to enhance the effectiveness of their responsible investment approach.
Despite the motivations for engagement laid out earlier in this report, there remains significant inertia among fixed income investors to engage.