Integrating RI as part of investment analyses is no longer an option. In addition to meeting regulatory and stakeholder expectations, it allows for better management of financial risks and uncovering underlying opportunities. This paper elaborates on opportunities to integrate RI across core fixed income.
Executive summary
- Core fixed income plays an important role in portfolio diversification and with the growing attention on responsible investment considerations, there is a need to actively consider these factors along core fixed income strategies.
- When compared to equities, integration of responsible investment considerations within core fixed income is less straightforward due to inherent characteristics of the asset class.
- Engagement within core fixed income can be useful to understand how issuers approach responsible investment as well as to influence behavior towards addressing responsible investment risks.
- While the process for integration of responsible investment is similar across sovereign bonds, supranational, sub-sovereign and agency (SSA) bonds and corporate credits, there are some important differences to note.
- Despite its setbacks, emerging market debt is fast gaining popularity amongst investors. Through the synergy of public and private partnerships, there is potential to bring real impact.
