Venk Reddy, CIO of Sustainable Credit, and Marcus Moore, Assistant Portfolio Manager, provided a behind-the-scenes look at how sustainability factors impact creditworthiness and how you, as a fixed income investor, can make a difference with your capital.
Osterweis’ Sustainable Credit Team conducts deep fundamental credit research on corporate debt, including measuring a company along a proprietary Sustainability Spectrum®. The Sustainability Spectrum® shifts the focus beyond traditional environmental, social, and governance (ESG) factors to intentionality, proactivity, and progress.
Sustainability Spectrum Stages
|Sustainability Spectrum®||Using Capital to Reward Company Progress|
|Awareness||Demonstrate awareness of environmental, social and governance issues most impactful to the industry or business|
|Strategy||Evidence of a clear strategy to address sustainability issues from a competitive, financial materiality and an evolutionary perspective|
|Execution||Must show meaningful strides towards improvements in sustainability best practices|
|Measurement||Determine how to measure efforts and defining what success means over what time period|
The team uses its proprietary GreenSlate™ software to document track companies progress over time. Key features:
- Populate and track findings in proprietary Green Slate™ software
- Active focus on E, S, and G
- Utilize Truvalue Labs SASB-aligned factor-based data
- Other references: Bloomberg, Sustainalytics, RobecoSAM, ISS, and Carbon Disclosure Project
- Green Slate™ status
The stages of the Sustainability Spectrum® are: Awareness, Strategy, Execution, and Measurement. Using the Sustainability Spectrum® assists in identifying companies that are leaders in their sectors in key areas of sustainable business practices or who are making or are likely to make visible progress toward appropriate sustainable practices.
Our repeatable approach to credit investing means every holding is proactively selected to meet our fundamental standards, which includes sustainable business practices.