Sustainable investing is traditionally an equity concept. Its history is largely devoid of fixed income. Yet that appears to be changing.
The growing desire from clients for products that embed ethical values, alongside growing evidence that sustainable approaches do not compromise financial performance, has led to a surge in enthusiasm for sustainable approaches to investing across all asset classes. But is this all hype? Does it truly belong in the world of credit?
Before attempting to tackle this question, it is worth laying out what we mean by sustainable investing, since there is no universally agreed definition. We consider it to be the practice of investing in companies that will deliver a net benefit to society. The companies must provide products or services that make the world better, while at the same time exhibiting sector-leading environmental, social and governance (ESG) standards.