Net-Zero Alignment: An ESG Policy Approach

The reach of the bond market extends into every area of economic activity. Impact policies in fixed income portfolios can encourage positive change in areas identified by the United Nations’ Sustainable Development Goals. Meeting The Paris Agreement will require investment in effective transition initiatives, funded by asset owners with widely different return expectations. Corporations and governments will ultimately turn to the bond market for additional capital, reinforcing its importance in achieving these global targets. We will show how our integrated and nuanced approach to ESG analysis can complement management of transition risks within a Paris-aligned corporate bond portfolio. Our approach illustrates how asset owners can directly address climate change in their investment policies, without compromising portfolio returns.

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