Margret Smits’ Post

🚀 In our latest peer group study, we confirm that Robeco's Global Multi-Factor Credits (GMFC) strategy remains a consistent style diversifier compared to traditional global credit strategies. With low correlation, low tracking error, and low volatility, it stands out as a core credit allocation. 📊 Since its inception in 2015, GMFC has maintained the lowest average outperformance correlation among peers, offering unique stability in turbulent markets. Its systematic investment process integrates ESG factors, ensuring sustainable investment principles. 🌱 As a cost-effective alternative to passive strategies, GMFC is an appealing choice for asset owners seeking steady performance and diversification. Download the full study to explore the results in detail! https://ro-be.co/3jht78yu #FactorInvesting #Sustainability #GlobalCredits

Repurchase agreements are an obscure but important part of the bond market and wider financial system, with trillions of dollars’ worth of securities traded every day. The rapid growth of the green and sustainable bond market issued by sovereigns in recent years has led to the slow emergence of a repo market for these transactions. ‘Sovereigns often have been known to sometimes limit the size of their inaugural sustainable bonds due to liquidity concerns and are then concerned about how to build out the curve and what maturities to issue in,’ said Robert White, head of the green and sustainable hub for the Americas at Natixis Corporate & Investment Banking. ‘In an ideal world, a deep sustainable repo market can remove and mitigate those concerns.’ #sustainablefinance #green #repo

Candriam credit analysis significantly benefits from the inclusion of extra-financial indicators. A lack of governance has contributed to significant bond market events, such as the Italian state's buy-out of Banca Monte dei Paschi di Siena and the Swiss-government-assisted acquisition of Credit Suisse by UBS. Additionally, climate change poses a tangible and material risk to bonds. For a deeper understanding, read our white paper on the sustainable future for investment grade credit by Dany da Fonseca, CFA Patrick Z. Nicolas Jullien, CFA #candriam #ESG #fixedincome https://lnkd.in/eNk7gwrF

Embedded Finance provides banks with a strategic capability to democratize and scale their ESG solutions for partners and consumers, accelerating the industry’s transition to net zero.

"There's just no demand for 'green' products" - said those now lining up to get involved in sustainability-linked finance. The World Bank (IBRD, Aaa/AAA) successfully raised $6.5 billion through a dual-tranche Sustainable Development Bond issuance, marking its largest order book to date. The offering included a $3 billion 2-year bond maturing in August 2026 and a $3.5 billion 10-year bond maturing in August 2034. The bonds attracted over 300 orders totaling more than $22.7 billion, reflecting strong global demand for safe, liquid investments that support sustainable development. https://lnkd.in/daCDQgBG.

Breaking the ESG Barrier: Empowering Credit Investors Through Better and Faster Data Investors weighing companies’ ESG exposures feel frustrated by the challenges of either sourcing data from third-party providers or attempting to do their own research. But their frustrations may ease, thanks to a new approach to ESG research. AllianceBernstein's team of Patrick O'Connell, CFA Fixed Income Responsible Investing Research; Tiffanie Wong, CFA, Director Fixed Income Responsible Investing Portfolio Management; and Markus Peters, Director Fixed Income Business Development and Strategy, Responsible Investing, explain. #fixedincome #esg #sustainableinvesting #esgdata https://lnkd.in/d2cmC-SK

As we move into the next phase of ESG investing, bondholders are reviewing the value of their portfolios. Are their investments making an impact and if so, how much? It is a challenging question to address because the answer requires access to documentation, expertise to extract the data, and resources to scale. Join Bloomberg experts to discuss the sustainable fixed income market, managing the complexities of impact and allocation data, and learn more about the Bloomberg Terminal and Enterprise Data workflows on Tue May 21 @10am EST, 3pm BST. Registration Link below. #SFI, #ESG, #Impact,#Sustainability https://lnkd.in/eKmhAign

Found in the wild: just when you thought you were safe from the Chinese "social credit score" system, comes this little gem. From the site: "The purpose behind personal ESG scores involves promoting more mindful behaviors towards the environment and society. By holding individuals accountable for their actions, these scores encourage better choices and habits, leading to a positive change on a larger scale. "Since this is still a relatively new concept, the current level of transparency is a bit murky. In many cases, people are generally unaware that they even have an ESG score. "For example, consumers who have accounts with Merrill Lynch will be able to view their score, whatever that may be. Lenders will use this system to choose who they extend services or credit. The main reason is that companies, including lenders, are graded according to the ESG standards. "Their business and prosperity depend directly on their hiring practices, gender diversity, social and environmental impact, and other ESG factors. As they must prove their case, they must also show that their clients meet the standards they are being graded." Having become too big to fail, Western banks are quickly becoming the enemy of freedom... Tom Kirkman

Here’s this note from Nawar Alsaadi, FSA, SIPC: "ESG performance is increasingly becoming a key differentiator for companies across industries. Case in point, this recent story from Bloomberg on banking losing underwriting fees due to poor ESG scores: Ulf Erlandsson, founder and chief executive of the Anthropocene Fixed Income Institute, says he’s aware of “a number of issuers” that have been close to putting their bank counterparties “in the box” — industry-speak for halting business with them for a period of time — if a bank is “fundamentally misaligned” with an issuer’s own ESG goals. The story cites a couple of examples where banks like Barclays lost business due to ESG performance concerns by issuing counterparties: “Last May, Barclays abandoned plans to respond to a request-for-proposal from NIB after concluding it was unlikely to succeed due to a low ESG score, according to one of the people familiar with the matter.” Another example of an issuer using ESG as a tool to select underwriters is Berlin Hyp AG, a German commercial real estate bank and a regular issuer of green, social and sustainability-linked debt. Since 2022, it has asked dealer banks to provide information on how many sustainable bonds they’ve underwritten, as well as how many deals for fossil-fuel companies and projects they’ve funded. “In the end, it’s about reputational risk for us,” said Bodo Winkler, Berlin Hyp’s head of funding and investor relations. “If a dealer’s fossil-finance numbers are going up year-on-year, then our values aren’t aligned and it’s important we don’t sit together.” And this is not only about banking, a couple of weeks ago, I cited a Deloitte survey of 1300 chemical and energy industry buyers that revealed a strong relationship between sustainability performance and buyers’ willingness to sign long-term contracts and pay premium prices. Those who think ESG and sustainability was some kind of fad, and that we are going back to companies doing business with total disregard to their environmental, social, and governance performance, need to think again. Business surveys unquestionably reflect a deepening relationship between business and sustainability. And it is clear that companies that fail to deliver on the sustainability front will increasingly lose market share and lose relevance." #esg #climate https://lnkd.in/euxRMzG6