Fixed income

ESG analysis provides fixed income investors with additional insight into issuer creditworthiness. To hear more about our fixed income work, contact us.

Case studies and guidance for esg integratio

Guidance and case studies for ESG integration: equities and fixed income


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 their analysis.

The ESG integration framework

The ESG integration framework


After extensive analysis of the ESG integration techniques of direct investors across the globe, CFA Institute and PRI collated the many ESG integration techniques used by practitioners and developed the ESG Integration Framework (see below). This article is taken from the Guidance and case studies for ESG integration: equities and ...


ESG integration in the Americas: markets, practices, and data


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.

The ESG in credit ratings initiative aims to enhance the transparent and systematic integration of ESG factors in credit risk analysis. The PRI is facilitating a dialogue between credit rating agencies (CRAs) and investors to cultivate a common language, discuss ESG risks to creditworthiness and bridge investor-CRA disconnects.

Read more about the ESG in credit ratings initiative

Bondholder engagement resources


ESG engagement for fixed income investors: Managing risks, enhancing returns

Principle 2 of the six Principles encourages investors to be active stewards of their investments and incorporate ESG factors into their ownership policies and practices across different asset classes.

Engaging with non-investment grade issuers

Case study by Neuberger Berman

Engaging with a state-owned enterprise issuer

Case study by Hermes Investment Management

Engaging to deepen insight

Case study by Breckinridge Capital Advisors

Engaging with sovereign green bond issuers

Case study by BNP Paribas Asset Management

Webinar: ESG engagement for fixed income investors

Integrating ESG factors into issuer analysis

In fixed income, a key application for ESG information is to inform analysis of issuer creditworthiness. ESG issues, such as corruption or climate change, are potential risks to macro factors that may affect an issuer’s ability to repay its debt.

ESG screening in fixed income investing

Fixed income investors apply ESG filters or screens to their investment universe to control which issuers or securities are considered for investment. This is an effective way of ensuring their investments are aligned with their (client’s) ethical motivations and reduces reputational risks.

Proportion of PRI signatories engaging with issuers on ESG management (2014)

Engaging issuers on ESG issues

Debt and equity holders both stand to benefit financially from successful engagements, as ESG-related risks are mitigated and opportunities maximised.

Growth of green bonds issuance 2007–2014

Themed fixed income investing

Investment products such as green bonds are seen by many as a way of addressing ESG risks such as climate change and water scarcity.

Sovereign issuers

Integrating ESG factors into sovereign issuer analysis

Governance factors such as institutional strength and political risks will have an impact on a sovereign’s ability and willingness to repay its debt on time. A country’s exposure and resilience to systemic environmental risks such as water scarcity will affect economic outputs, borrowing and its ability to attract foreign investment ...

Sovereign and sub-sovereign case studies

Education and European government bonds

Case study by BNP Paribas Investment Partners

Integrating ESG factors in partnership with an NGO

Case study by Allianz Group in Austria

Corporate issuers

Integrating ESG factors into corporate issuer analysis

Analyses of governance factors such as remuneration and financial auditing are common among bond investors, but few systematically integrate a wide range of ESG factors into credit analysis.

Corporate case studies

Resilience to climate change in the UK water sector

Case study by Royal London Asset Management

Integrating ESG factors in partnership with an NGO

Case study by Allianz Group in Austria

Community development programmes in Mexico

Case study by HSBC Asset Managment Mexico

Financial sector issuers and ABS

Integrating ESG factors into financial issuer and ABS analysis

In recent years, investors have become increasingly sensitive to the potential financial impacts of risk management failures, malpractice fines and banks’ ability to meet new regulatory standards.

Financial sector and ABS case studies

ESG in UK social housing investment

Case study by M&G Investments

Integrating ESG factors in partnership with an NGO

Case study by Allianz Group in Austria