Durable. Notre engagement.

The advantages and challenges of ESG in fixed income

18 July 2023 |
Active ESG
In our latest video insight, Mitch Reznick, Head of Sustainable Fixed Income, discusses the some of the key dynamics that underpin the fast-growing sustainable debt market.
  • Unlike equity – where investors have access to one security – credit investors have the ability to align their perception of risk about a particular company with an exact volatility contribution that they want because credit allows for a variety of ways to access that company.
  • Sustainable investment has a dual objective: attractive returns for investors while at the same time achieving environmental outcomes. It can be a tricky balance to achieve because there can sometimes be tensions between the two objectives. Many companies, however, are tilting in this direction.
  • Sustainability cannot easily be broken down into convenient silos and there are various second-order impacts. Climate change can impact biodiversity; species degradation can impact social issues and so on. Engagement can play a crucial role in staying on top of these second-order impacts.

For further information on Federated Hermes’ credit capabilities, please click here.

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