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    NordSIP Insights – Sustainable Fixed Income Handbook 2022

    How time flies! Five years ago, we published our first ever edition of the Sustainable Fixed Income Handbook, upon request from one of our Nordic readers working for a Stockholm-based pension fund. “Do you know of any asset managers integrating ESG into fixed income?” she asked. “I’ve only met one or two, but surely there must be more out there?” We successfully convinced a number of managers to answer our call and contribute to the first issue of the magazine.

    At the time, the green bond market hadn’t really taken off yet and fixed income managers were still hung up on the idea that, yes, ‘G’ was a determining factor in credit performance, but the ‘E’ or ‘S’ considerations were too long-term to be relevant, especially for short maturity issues.

    Nevertheless, slowly but surely the ball started rolling and gathering speed. A prolonged period of low interest rates meant little action for the fixed income crew. More and more managers decided that, if one basis point here or there wasn’t going to move the needle on the bottom line, they might as well invest sustainably.

    Today, as volatility has re-entered the game, ESG seems to be well entrenched. It has become “business as usual”. Moreover, sustainability-labelled bonds have proved much more resilient than expected. In fact, the green bond market functions better than the traditional market in times of crisis, we heard.

    So, all is well then? Not quite! The world still needs way more money to fund the solutions to the climate crisis, let alone a just transition. Also, whoever claims to have achieved ESG integration should still be scrutinised for traces of greenwashing. There is a fine balance between the different components of the investment process, from data sourcing to engagement, while watching out for inflation and geopolitical risk. In the end, what Sustainable Fixed Income requires is expertise, and this is what our Handbook aims to bring forward, year after year.

    Tired of flipping the book? Access individual articles or download the pdf here!

    1. the editor’s word: a fine balance
    2. Developed Market Sovereign Bonds – ESG Factors Under the Spotlight, by Lior Jassur, Peter A. Goves, Annallisa Piazza and Carl Ang, MFS Investments
    3. Decarbonising Fixed Income Portfolios – The Hear of the Matter, based on Research by Zarina Nasib and Alan Meng, FTSE Russell
    4. ESG Integration: Business as Usual for Swedish Portfolio Managers, an interview with Maria Ljungqvist, Aktie-Ansvar, Julia Stålbro, Öhman Fonder and Charlotta Sjölander, Nordea AM.
    5. Sustainable Fixed Income ETF in Times of Crisis, an interview with Florian Cisana, UBS Asset Management
    6. Investing in Engagement, Income and Avoiding Defaults, an interview with Christopher Kocinski, CFA Neuberger Berman
    7. The Confidences of a Green Bond Investor, and interview with Alexander Gusterman, Länsförsäkringar
    8. Public-to-Private: Abritrage of a Lifetime? by Ulf Erlandsson, Anthropocene Fixed Income Institute
    9. Inflation is an ESG Topic, too by Jasper Cox, PRI

     

    Tired of flipping the book? Access individual articles or download the pdf here!