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Pricing ESG risk in credit markets: reinforcing our conviction

To analyse credit risks with greater precision, we developed a pricing model last year to capture the influence of environmental, social and governance (ESG) factors on credit spreads. It showed a convincing relationship between ESG risk and credit spreads, manifesting as an ESG-risk curve.

After expanding this research, we found this relationship between ESG risk and credit spreads to be reinforced.

More Insights

Credit Pulse: market update – 15 October 2021
In our latest Credit Pulse, we look at how sustainability is managed within our fixed income offering.
SDG Engagement High Yield: H1 Report, 2021
We have been delighted both with our financial results and with the substantive, high-touch engagement outcomes of our inaugural engagement year.
It’s not easy being green: analysing corporate treatment of carbon-intensive activities
Companies are recognising the benefits of being seen as a decarbonisation leader.
SDG Engagement High Yield Credit: 2020 Annual Report
Building the foundation and hitting our stride: a promising, productive inaugural engagement year
Back to the future: The predicative power of science-based targets
Authenticity in ESG integration
We explain why the delivery of Sustainable Wealth Creation has and always will be our core purpose.