ESG integration
We include material Environmental, Social and Governance factors in our analysis and investment decisions across our Income and Fixed Interest funds.
We view ESG integration as a way of understanding risks and opportunities outside of traditional credit research. ESG risks can highlight potential future credit concerns.
We use ESG integration in our vanilla funds to better understand risks and opportunities, probability of credit downgrades as well as any variations on liquidity and pricing particularly in the secondary market.
ESG integration and engagement allows us to use our responsibility as active investors to influence the market by promoting sustainable issuers and nudging towards improved transparency:
Our ESG integration process includes:
- ESG Research – understanding ESG risks across different issuers
- Engagement – using our influence to nudge issuers towards sustainable practices
- Pricing material ESG risks – ensure we are compensated for ESG risks
- Monitor and review – monitor changes to issuers and broader risks
We collaborate widely and leverage other areas of Pendal as well as our Regnan in-house ESG research team.
Our ESG integration process is iterative: monitoring progress and controversies feeds into our ESG research and directs our engagements.
More Information
Download ESG Integration for Income and Fixed Income – (PDF 219kb)
ESG Engagement
Pendal leads engagement with investee companies and issuers on ESG issues.
Active engagement can enhance the quality of information available to the market more generally, as well as facilitate improved oversight and management of these matters across a range of market participants.
The Income and Fixed Interest team is committed to supporting Pendal’s responsible investment practices, including through sustainable and ethical products.
The team goes beyond engagement to support ESG risk management and engages for sustainability and impact outcomes.
We encourage issuers to be more ambitious with ESG goals, address negative social or environmental impacts and strengthen or formalise commitments to impact outcomes.
Find out more
Read articles and listen to podcasts from Pendal portfolio managers and analysts at The Point