Credit or ESG, Which Matters More?

Engagement in fixed income offers an important opportunity to influence company behaviour. We believe that the cost of debt can provide an explicit signal to management of the need to act and may create an engagement opportunity more powerful than that offered to equity investors through proxy voting. If bondholders continue to be concerned by the company’s management of any ESG risks, there is ample opportunity for engagement during the looming debt refinancing cycle.In this case study we examine the Equifax data breach and what it meant in terms of their Credit and ESG Ratings.

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