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RPIA Investment Integration Overview
How We Engage With Issuers
As an active fixed income investor, we occupy an important position among capital providers to many corporations. We believe engaging with issuers is a valuable part of our role as stewards of capital. Engagements occur only as needed, and the nature and level of engagements may vary from issuer to issuer. Engagement with issuers can be conducted at the pre-issuance or pre-deal stage, at pre- investment stage, during the holding period, at any new issue or refinancing stage, or if an issuer faces a material credit impact. An important part of our ESG Integration Framework, our engagement process can be summarized in 4 steps: At the end of 2023, we began setting monthly targets for ESG engagements.
Identifying the Issuer
Step 1
Each Credit Research Portfolio Manager is responsible for identifying at least one issuer per month within their coverage universe. The issuer can be identified based on any or all of the following characteristics:
• Size – is there significant mandate/firm exposure to the issuer? • Acute Need – is there currently or has there recently been headline risk pertaining to the specific issuer? • Theme – would the issuer be impacted by a broader theme within one of the 3 ESG pillars? • Sector – is there a broader trend occurring within the issuer’s specific sector?
The proposed issuers for the upcoming month are reviewed by the broader investment team, with recommendations from our ESG Specialist and co-CIOs.
Step 2
Materiality
While some ESG Factors are common across many industries, we leverage the SASB standards along with our investment team’s sector knowledge to determine the factors most likely to be material for a given industry. Our RP Barometer aids in the determination of what we believe are the most material ESG factors for a given credit, which we use to supplement our financial credit analysis of the issuer.
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