Page 15 | RPIA SUSTAINABILITY REPORT 2024
ESG INTEGRATION
OVERVIEW
SUSTAINABILITY
CULTURE & VALUES
OUR ESG INTEGRATION PROCESS
Integration Framework Our ESG integration approach emphasizes our belief that supplementing our fundamental and technical analysis with relevant ESG factors is important in assessing risks and opportunities. Incorporating ESG factors into our investment process – both at the issuer-level and in the context of specific sectors and regions – enables us to have a complete view of material credit risks. As the landscape evolves with new ESG data, disclosures, regulations, and reporting frameworks, we will continue to mature our approach to ESG integration. Our ESG integration framework enables the investment team to collect and analyze ESG-related data and disclosures from issuers. As part of our framework, we leverage the SASB standards, TCFD guidance, and our unique views and deep sector knowledge to assess ESG topics and trends that we believe are most likely to impact the investments we make on behalf of the portfolios we manage. ESG analysis occurs in line with portfolio objectives and in collaboration with our fundamental credit analysis when assessing potential investment opportunities. We also benefit from our global capital markets expertise, which enhances the team’s ability to engage with issuers on disclosures, trends, gaps and risks, including ESG risks, that we have identified. The application of ESG integration varies in weight and prominence between strategies, we encourage investors to review the offering documents of the respective RPIA managed funds for additional information. Apart from our thematic portfolios (see page 23), our approach to integrating ESG considerations does not impose investment limitations.
We are able and willing to invest in companies that are still developing their ESG practices or are early in their ESG journeys. Recognizing the magnitude of efforts required to address sustainability and climate challenges, we aim to support corporations in adapting to meet there demands, rather than avoiding the challenges they face. ESG information, including details related to material risks and opportunities is part of the total mix of information RPIA considers as part of its investment decision making, and is not itself investment determinative. There is considerable nuance involved in balancing the probability and potential severity of ESG risks against the need for additional spread compensation. To navigate this complexity, we reply on our investment team’s expertise and experience for guidance. As previously mentioned, RPIA offers thematic portfolios that focus on specific ESG objectives. We are pleased to share an update on the progress of the Fossil Fuel Exclusion strategy on page 23 of this report.
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