Engagement at TwentyFour
We believe engagement should be a constructive, active dialogue between investors and companies on all aspects of their ESG performance.
While fixed income investors do not have voting rights in the way shareholders do, larger firms typically issue bonds multiple times a year, which puts bondholders in a strong position to be able to influence corporate policy by engaging with management on an ongoing basis.
At TwentyFour we aim to engage regularly with the management of every issuer whose bonds we hold in our portfolios, to better understand their ESG strengths and weaknesses, monitor their direction of travel, and overall encourage better ESG practices.
As part of our commitment to the UK Stewardship Code we publish a quarterly summary of our engagements with bond issuers, along with details of any resulting investment decisions, at the bottom of this page.
ESG investing is a fast-evolving discipline, and approaches can vary markedly from manager to manager. We therefore believe this makes the quality of the ESG data used in different scoring systems critical to outcomes, and even more so in fixed income, where we think data provision is improving but still well behind the level we see in the public equity markets. Because of this, we regularly engage with our external data providers and push them to extend their output.
Engagement in practice
We take our stewardship responsibilities seriously and look to always act in the best interests of our clients. We conduct a significant amount of due diligence on issuers with whom we invest, which enables us to avoid companies we believe do not meet our high standards in strategy, performance and/or ESG factors.
The general principals of our engagements are not fund or geography specific. Global fixed income markets are large, diverse, and complex. As such our approach is designed to retain a dynamic approach to serving our clients’ needs. In general we will engage on any topic as and when we feel it is in our clients’ interests to do so.
Investment or ESG issues can arise post-investment, and where we are concerned about specific ESG matters, management behaviour or treatment of bondholders, the portfolio managers will engage with the appropriate senior management or board member of the company involved. Within our proprietary ESG model, housed in our Observatory portfolio management system, we have a template which enables portfolio managers to log any company engagement by the following steps:
- Nature of the concern
- Desired outcome
- Engagement
- Response
- Action/outcome
Our system is also able to capture and log any associated email correspondence, write-up, blog or any other related documents to build a detailed history of our engagement with every bond issuer.
We generally keep such discussions private as we believe better outcomes can occur this way, but we have on occasion published blogs discussing issues that we have found difficult to resolve and we felt deserved to be brought to our clients’ or the broader market’s attention.
For example:
- Coronavirus Predatory Pricing is an ESG Red Flag
- Green AT1 Raises More Questions Than Answers
- Do Green Bonds Work for Investors
Generally, if we have not been able to resolve an issue satisfactorily, we would not invest in bonds issued by those companies, however we would continue dialogue to ensure, as far as possible, the company in question understands why we are not investing in its bonds and that we are kept up to date with any developments including changes in management behaviours. If we are already invested in the bonds, it is possible the matter will result in us exiting the investment, at which point transparency may be delayed to avoid compromising the interests of our clients.
Case Studies
Recent Engagements
As a signatory to the existing FRC UK Stewardship Code we publish quarterly on our website the following engagement information:
Q1 2026
83
Number of Borrower meetings / updates
4
Number of corporate actions
15 (E), 4 (S), 7 (G)
Summary of Corporate engagements
Sample Examples of ESG driven investment decisions
Barclays (BARC)
Issue
We engaged with Barclays, a leading financial institution and major bond issuer, to understand how its biodiversity commitments translate into day-to-day lending and underwriting decisions. Specifically, we sought clarity on how biodiversity and land-use risks are considered in loan approvals, whether clients in high-impact sectors encounter specific improvement standards, and how Barclays engages with clients where biodiversity risks are elevated.
Response
Barclays provided a detailed response highlighting three core policy statements: Forestry and Agricultural Commodities (deforestation and land conversion risk), Protected Areas (restricting financing for projects in ecologically sensitive zone), and Climate Change (protecting critical biomes such as the Amazon and Arctic). Together, these represent a meaningful policy framework, though one that is largely restriction-based rather than target-driven.
Of particular note, in 2025 Barclays published its Nature White Paper setting out its application of the Taskforce on Nature-related Financial Disclosures (TNFD) LEAP framework to assess nature-related risks at the individual operating site level, initially across its mining and European power portfolios. Barclays is extending this methodology to automotive manufacturing in 2026 and has integrated nature-related criteria into its Client Transition Framework across four sectors: power, mining, automotive and food.
In our view, Barclays is among the more advanced large banks regarding biodiversity, with a credible analytical framework and demonstrates clear evidence of client engagement. That said, the response remains largely qualitative. As frameworks like TNFD mature and disclosure expectations rise, we would expect to see Barclays translate this strong analytical foundation into more measurable, reportable outcomes.
Action
Satisfactory response, continue to monitor.
SSE (SSELN)
Issue
We engaged with multinational energy company SSE on its group-level biodiversity commitments. Our aim was to seek clarity on how it defines “no net loss” and “net gain” on major capital projects, and how these align with emerging regulatory frameworks.
Response
SSE confirmed a group-wide commitment to “no net loss” of biodiversity on all large onshore capital projects consented from April 2023, stepping up to “net gain” for projects consented from April 2025. Its transmission business was the first developer in the UK to commit to biodiversity net gain on all new projects, and it has since brought that commitment forward by two years.
Projects in England use the DEFRA Biodiversity Metric, where 10% biodiversity net gain became mandatory for major developments in February 2024, extending to Nationally Significant Infrastructure Projects from November 2025. SSE is also developing a group-wide metric to provide a consistent methodology across business units.
Overall, we think SSE is an encouraging example of a utilities issuer. The company has been ahead of the regulatory curve on biodiversity since 2019, with quantifiable targets, a published methodology, and a track record of delivery.
Action
Strong response, continue to hold.
Duke Energy (DUK)
Issue
We engaged with Duke Energy management on the potential for data centre growth to drive higher infrastructure costs for residential and commercial customers. Management outlined a multi-layered financial vetting and contract process designed to ringfence those costs from the general ratepayer.
Response
Upfront Commitment: The process begins with a Letter of Agreement that triggers a 30-day window for a $30-40 million refundable capital advance. This deposit ensures only serious, well-capitalised projects proceed before Duke deploys grid-connection capital.
Credit Risk Mitigation: Management conducts detailed analysis of borrower creditworthiness, requiring additional collateral or credit support for weaker financial profiles to prevent default risk from falling on residential customers.
Stranded Asset Protection: Standard Electric Service Agreements include mandatory termination charges and cancellation fees. These clauses ensure the utility recovers its investment from the developer, rather than the general ratepayer, should a project be abandoned mid-stream.
Operational Safeguards: Contracts typically feature minimum-take provisions (75% of scheduled power) and interruptibility clauses, allowing Duke to curtail data centre load during peak demand periods. This reduces the need for expensive incremental generation capacity.
Action
Duke Energy's multi-layered approach, upfront capital commitments, credit screening, contractual cost recovery, and demand management provisions — credibly shifts the financial risk of data centre growth onto developers rather than the existing customer base. Minimum-take and interruptibility clauses further reduce the risk of overbuilding generation capacity to serve speculative load. We view management as alive to its obligations to the broader ratepayer and will monitor whether these protections prove sufficient as data centre demand scales toward Duke's projected 10% of total electricity sales by 2030.
Together Financial Services Limited
Issue
We engaged with Together regarding the higher-than-peer swap rate on the new transaction that was launched. This was an issue as it extracted significant value from the transaction.
Response
The main reason for the high swap rate was attributed to volatility in rates from the 2026 Iran War. However, Together eventually agreed to lower the swap rate by 20bp, which supported the economics for debt investors in the transaction.
Action
We participated in the new issue; it is encouraging to see Together addressing investor concerns and strengthening protection to bondholders.
AGL Credit Management
Issue
We engaged with AGL to review our credit assessment of the collateralised loan obligation (CLO) platform.
Response
AGL agreed to an on-site due diligence in New York, where we sought to focus on their Risk framework, following the default of First Brands Group.
We discussed the handling of the First Brands default within the CLO and the Risk framework surrounding such events. It was apparent to us that there continues to be a focus on growing assets under management (AUM) for the platform, while focusing less on risk management and oversight, which poses a risk for the performance of the platform.
Action
This was a useful engagement in confirming our decision to remain uninvested in the platform. We will continue to monitor the performance of the shelf, but we will need to see a strengthening in the risk framework primarily.
Useful links
Sustainability
