All Fixed income articles – Page 11
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Engagement guide
Tips for effective bondholder engagement
In this section, we present a summary of practical tips for effective bondholder engagement.
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Engagement guide
Defining objectives and measuring the effectiveness of engagement in fixed income
Once the list of target companies has been defined, investors need to set objectives and track the outcomes of their engagement practices to ensure their effectiveness.
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Engagement guideWhy engage as a fixed income investor?
Investors typically engage with companies and other types of issuers to identify, monitor and manage risks to their investment returns. In signing up to the PRI, investors affirm that ESG factors can have a material impact on those returns.
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Engagement guideESG engagement for fixed income investors
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.
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Thought leadershipESG, credit risk and ratings: part 1 - the state of play
Investors and credit rating agencies (CRAs) are ramping up efforts to consider environmental, social and governance (ESG) factors in credit risk analysis.
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Thought leadershipWhy ESG factors matter in credit risk analysis
Climate change, corporate scandals and the devastating effects of the global financial crisis are all stark reminders of why oversight, lack of transparency and accountability can negatively affect fixed income market pricing, volatility and, ultimately, financial stability.
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Thought leadership
Understanding credit ratings and ESG factors
It is important to understand what credit ratings actually measure, even if investors are familiar with credit rating agency rating scales: risks that affect fixed income instruments extend beyond credit risk, which is associated with the default probability of a borrower.
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Thought leadershipWhat rating agencies are doing on ESG factors
ESG factors are not completely new to credit analysis
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Thought leadershipHow investors are approaching ESG factors and credit risk
A majority of PRI signatories say they use some form of ESG approach when investing in FI instruments, but ESG consideration is still far from being an integral element of the credit assessment process.
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Thought leadership
Materiality and visibility of ESG factors in credit risk analysis
Many investors believe that CRAs should take a more proactive approach to highlighting ESG considerations in their analysis.
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Thought leadership
Environmental issues gaining traction
The COP21 Paris Agreement has contributed to renewed focus on environmental factors. Climate-related risks could diminish or increase, depending on how countries implement legislation and policies to fulfil their nationally determined contributions to reduce greenhouse gas emissions.
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Thought leadership
Communication and transparency
Many of the hurdles in the way of systematic and transparent incorporation of ESG factors in credit ratings and analysis can be ascribed to how credit risk-related information is conveyed.
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News and pressPRI teams with CFA Institute for global study on ESG investing
The Principles for Responsible Investment (PRI) and CFA Institute today announced that they will collaborate on a global study on environmental, social and governance (ESG) investing in a move to determine how widely ESG issues are used by mainstream investors.
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Blog post
How ESG investing affects financial performance
Integrating ESG factors is beneficial for investment decision making. Increasing numbers of asset owners and investors can agree on this, but there is a growing realisation that deeper analysis is required.
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PRI Web PageStatement on ESG in credit risk and ratings (available in different languages)
By signing the ESG in credit risk and ratings statement, credit rating agencies and fixed income investors commit to incorporating ESG into credit ratings and analysis in a systematic and transparent way. To date, the statement is supported by around than 180 investors (with over US$40trn in collective AUM) and ...
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PRI Web Page
负责任投资原则”（PRI）关于信用评级中的 ESG声明
我们签署，并认识到环境、社会和企业治理（ESG）因素会影响借款人的现金流量以及拖欠债务的可能性。因此ESG因素是评估借款人信用的重要因素。
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Technical guideFixed income investor guide
The Fixed income investor guide summarises the unique characteristics of fixed income with its various subcategories of issuers and instruments. It helps to explain why fixed income investors should take a bottom-up approach to RI while borrowing from the experiences of other asset classes, such as listed equities.
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Technical guide
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.
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Technical guideIntegrating ESG factors into sovereign issuer analysis
Based on discussions and presentations with the PRI fixed income sovereign working group, this report is a primer that provides an initial conceptual framework exploring ESG issues that might be material to sovereign bond risk assessments and pricing (2014).
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Technical guideIntegrating 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.
