Partner Insight: Climate and credit – if it's easy, you're not doing it right

Martin Foden, Head of Credit Research and Luca Giacalone, Senior ESG Credit Analyst, discuss the challenges of integrating climate conviction within credit portfolios and how in-house analysis and collaboration are key.

clock • 1 min read
Partner Insight: Climate and credit – if it's easy, you're not doing it right

At Royal London Asset Management, we have long understood the conflict at the heart of delivering effective ESG integration into credit funds. On the one hand, anything that can undermine the sustainability of issuers' balance sheets demands mitigation as an intrinsic part of any credible research process. On the other, delivering this authentically is not straightforward, and, far too often, purported integration amounts to little more than the adoption of seductively convenient shortcuts.

Challenges to integrating climate

With increased regulatory onus on asset owners and managers to demonstrate being reliable stewards of capital, it has become more important than ever to manage this conflict, particularly when it comes to climate. But first, to help ensure any solution is pointing in the right direction, enhancing our investment decisions whilst providing clients with the right insights to meet their responsibilities, it is worth looking briefly at the challenges to effective climate integration.

 

For professional investors only. This material is not suitable for a retail audience. Capital at risk. This is a financial promotion and is not investment advice. Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested. Portfolio characteristics and holdings are subject to change without notice. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.

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