The drive to push environmental, social and governance (ESG) investing into the mainstream has dominated the asset-management industry in recent years. While the discussion on ESG in many asset classes is well progressed, to date there has been less focus on ESG in asset-backed securities (ABS). Beyond looking at the explicit environmental elements of green ABS, there has been little emphasis on assessing the social and governance factors within securitisation.
In this issue of Spectrum, we consider all three axes of ESG analysis in the ABS space.
Andrew joined Hermes in April 2018 with 18 years of previous experience working in financial services, of which 13 years was managing structured finance as a portfolio manager. In his role as asset backed securities portfolio manager, he is responsible for sourcing and structuring ABS allocations within Hermes’ multi asset credit portfolios. Prior to Hermes, he was most recently the lead portfolio manager for European ABS at BlackRock, managing over $5bn of assets across portfolios including multi-asset fixed income funds, as well as segregated mandates. Prior to BlackRock, Andrew was the lead portfolio manager for ABS at ECM (European Credit Management, now part of Wells Fargo Asset Management) where he ran a team of ABS specialists managing dedicated ABS funds and allocations within wider multi-asset credit funds across European ABS, as well as US consumer ABS and Australian RMBS. Andrew started his career in financial services at Goldman Sachs in London where he worked alongside the European and emerging markets equities trading desks. Andrew holds an MA in Modern and Medieval Languages from Cambridge University.
Shareholder engagement and its effects on target companies
The award-winning study ‘ESG shareholder engagement and downside risk’, which uses engagement data from Hermes EOS, reveals that companies that are successfully engaged by EOS exhibit a lower risk profile, particularly when environmental issues are tackled.