To answer your question about green bond funds, Candriam targets the Sustainable Development Goals. For all green and social bonds, we can see how we identify and target specific sustainable development goals with different projects and KPI. For that we need clear transparency and reporting. If we do not have that, we will not invest or will start an engagement with the company. Gourlay: How do you deal with conflicts? The environment is important and in the West we are rich enough to have luxury and not think about it, but in parts of Asia, where the world’s carbon footprint is coming from, the S is more important. How would you deal with a coal company, for example, where if you do not fund it, lots of people could lose their jobs? It is good for the E but not the S. Forest: That is a challenge when you have to invest in emerging markets. We have to be creative in selecting issuers. We could also invest in social bonds.
There are also working groups. In Indonesia, for example, there is an investor group which has a dialogue with compa- nies concerning deforestation and the government. Candriam is working with the asset managers which are part of this organisation to make an impact. Emmons: Green, sustainable and environmental are also about
the transition pathway. While it is fair to say that certain parts of the emerging world generate a lot of emissions, it is perhaps true that parts of the developed world have been doing that for longer and may be outsourcing their carbon footprint. It is dif- ficult when you talk about China and other countries outsourc- ing their carbon footprint. It comes back to the need for trans- parency, strong independent research and raw data to identify idiosyncratic risk and where the best opportunities are. It is not enough to assume that carbon emissions are weighted towards a particular geography or sector, in-depth analysis needs to be conducted. Thompson: We haven’t talked about stewardship being harder in the bond world. For me, it is about how we, as asset owners, put pressure on our fund managers to engage with issuers to see how they are progressing over time. If you have labels, such as green bond, it helps, but it doesn’t get away from the pressure you can still apply as an asset owner on those issuers. It could be a case of a bond being issued which is not labelled green but knowing from your stewardship that the issuer will use the proceeds to make themselves more sustainable. Forest: In 2020, Candriam started an engagement framework for high-yield issuers. We want to invest in high-yield sustain- able debt, which is a challenge.
You need a strong research bench to be a good sustainable bond
investor. Daniel Loughney, Border to Coast Pension Partnership
14 June 2022 portfolio institutional roundtable: Sustainable debt
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32
