The relevance of fixed income instruments from a responsible investment perspective has long been identified and hardcoded in the UN Principles for Responsible Investment, originally launched in 2006. Despite this, the spotlight in responsible investment has been on equities, and the impact of Environmental, Social and Governance (ESG) factors on shareholder value.
The ESG implications on fixed income investments, as well as the role of creditors and bondholders in a sustainable financial market, have received comparably little attention. In this report we highlight how ESG factors and stewardship activities are integrated into BMO Global Asset Management’s corporate fixed income investments and engagement approach. We also look at how the growing Sustainable Bonds market is enabling fixed income investors to align investments with sustainability goals.
The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.
Changes in interest rates can reduce the value of your investment.
Screening out sectors or companies may result in less diversification and hence more volatility in investment values.