Momentum
We believe it can be counter-productive for asset managers to automatically deprive poorer ESG performers of capital. Instead, we would prefer to support companies that can show us a credible and demonstrable plan for improving the areas in which they score badly, which is why a strong Momentum score can increase an issuer’s overall TwentyFour ESG Score.
Controversies
In our ESG scoring system, Controversies can hurt a company’s overall ESG score very badly, since we believe they can reveal much about a company’s risk management and general governance culture. One negative event may be unavoidable, so the underlying source of the issue is important, but a series of issues may indicate a systemic risk.
Observatory is the tool that powers our ESG integration approach.
Designed in-house at TwentyFour, Observatory is our very own search engine for the global universe of fixed income – it stores hundreds of data points on over 30,000 bonds and helps us target the relative value opportunities that we think can help boost performance returns.
In Observatory, ESG analysis sits right alongside more traditional bond characteristics like duration, yield and rating – portfolio managers use the platform every day, ensuring ESG analysis is at the core of our regular investment process.
Observatory also enables us to report to clients on several criteria across our portfolios, ranging from the percentage of women on boards to carbon emissions intensity.