Responsible Investment in Fixed Income Markets

Joshua Kendall is Head of Sustainable Fixed Income at Bloomberg, and was previously Head of Responsible Investment Research and Stewardship at Insight Investment. He is an experienced responsible investment practitioner, whose experience extends across investment management, ESG research and stewardship.Dr Rory Sullivan is CEO of Chronos Sustainability and Visiting Professor in Practice at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. He is an internationally recognised expert on climate change and investment.

• 1. Introduction Part I: Fundamentals 2. Essential Concepts in Fixed Income Investing I: Function and Analysis 3. Essential Concepts in Fixed Income Investing II: Participants and Portfolios 4. The Landscape of Responsible Investment and Fixed Income Part II: Sovereign Investing 5. ESG Factors in Sovereign Debt Investing 6. ESG Considerations in Sovereign and Public Finance Credit Analysis 7. Sovereign ESG Risk Analysis and Engagement Part III: Corporate Investing 8. The Stewardship Mechanisms of Corporate Bond Investors 9. Connecting ESG factors with Credit Ratings 10. The Role of ESG Risk Factors in Corporate Credit Analysis 11. Responsible Investment Strategies in Corporate Fixed Income 12. ESG Research in Different Fixed Income Sectors Part IV: Impact Investing 13. Impact Investing in Fixed Income Markets 14. The Impact Bond Market 15. Using Bond Markets to Achieve Issuer Sustainability Outcomes 16. Impact Bonds: Issuers and Investors Part V: Market Influencers 17. The Role of Sustainable Treasury Teams 18. ESG Data, Ratings and Indexes 19. Assessing the Responsible Investment Performance of Fixed Income Fund Managers 20. Delivering Sustainable Investment Objectives through the Capital Markets Part VI: Investment Products 21. Investment Product Design and Development 22. Understanding Trends and Drivers in Fixed Income Investment Products Part VII: Looking Forward 23. Regulation, Policy and Fixed Income 24. Measuring the Impact of Climate Change 25. Fixed Income Markets and Responsible Investment: The Past, the Present and the Future

'As CFA UK continues to support the investment sector to upskill and meet sustainability challenges, we are delighted to recommend this essential publication.'CFA UK'What really impressed me about the book was the timely and invaluable overview of fixed income and responsible investment. This enables readers to understand the relevance of sustainability to fixed income, with real life examples and contributions from practitioners and organisations. Considerable work has gone into outlining the outcomes that have been achieved and to reflect on the lessons learned. The approach taken is, commendably, one that impresses upon readers the dynamic nature of the sustainable finance movement and its relationship with fixed income, always keen to offer practical suggestions on how progress might be encouraged and developed.'Fraser Lundie, Board member, CFA UK, and Head of Fixed Income, Federated Hermes'How can we ensure that fixed income investments contribute to the goals of sustainable development? What role do standards and green taxonomies play in encouraging investment in socially and environmentally sustainable activities? How can we encourage greater investment in emerging markets? This book analyses the theory and the practice of responsible investment in fixed income markets. It is an invaluable guide to policymakers looking to design and implement policies and frameworks to drive sustainable finance.'Helena Viñes Fiestas, Commissioner of the Spanish Financial Markets Authority and Rapporteur of the EU Platform on Sustainable Finance'This book fills a critical gap in the responsible investment literature. It provides academics and researchers with rich practical insights into the realities of how investors take account of environmental, social and governance (ESG) issues in their investment practices and processes, and into the costs and benefits of doing so. It also identifies those areas – impact assessment, the influence of regulations, standards and taxonomies, the relationship between sustainability and financial performance – where academics and practitioners should work together in coming years.'Simon Dietz, Professor of Environmental Policy, London School of Economics'This is a timely publication providing much needed, practical advice from experts with hands-on experience. Fixed income markets have always lagged their equity peers when it comes to ESG integration, analysis and innovation. Making the leap to corporate debt is one step, but investors, issuers and regulators alike have struggled with how to bridge the gap to other types of issuers and assets. The book is a welcome compliment to the work the World Bank has been doing on sovereign ESG analysis and will be particularly useful for local investors in our client countries which have major allocations to public issuers and real asset classes.'Fiona Stewart, Lead Financial Sector Specialist, World Bank'Despite being the world's largest investment asset class, little is known about how fixed income investors might support and enable the transition to a low-carbon economy. This timely book comprehensively addresses that gap. It describes exactly how investors integrate social and environmental factors into their investment research and decision-making and into their engagement. And, critically, it explains how investors and other stakeholders can work together to ensure that the fixed income markets respond effectively and at the scale needed to the threats, challenges, risks, opportunities and needs presented by climate change and sustainable development.'Adam Matthews, Chief Responsible Investment Officer (CRIO) Church of England Pensions Board and Chair Transition Pathway Initiative (TPI)