| TwentyFour Asset Management

At TwentyFour, we are committed to Corporate Social Responsibility (CSR) and these ideals are at the core of our culture. As a firm we strive to have a positive impact on the environment, society and the communities in which we work and live. You will see this commitment to CSR demonstrated in many ways.

Diversity

Community

Charity

Environment

Climate change

Climate change is a clear and present risk to the global economy and our clients’ investments.

TwentyFour believes it has a responsibility to drive industry change in promoting better environmental outcomes, especially regarding contributing to the development of a net zero carbon economy.

Through our Carbon Emissions Engagement Policy we assess companies’ CO₂ intensity and monitor their reduction plans over time, with the aim of reducing both CO₂ emissions and production technologies which contribute to climate change and pollution. We also track bond issuers’ commitment to the UN Sustainable Development Goals.

Our commitment

We believe ESG factors such as climate change, pollution and social upheaval are a clear and present risk to our clients’ long term objectives. As an asset manager, we thus have a duty to consider these as part of our regular investment process.

Many of our clients have specific sustainability and ESG goals for their investments and we are pleased to support these with our Sustainable fund range.

However, we are also committed to demonstrating sustainable values as a business ourselves. We are a signatory to the UK Stewardship Code and the UN’s Principles for Responsible Investment, and we have long term commitments to industry level initiatives aimed at improving diversity in asset management. For more detail, please see our Corporate Social Responsibility report.

At TwentyFour we know how important it is to our clients and society at large that we ensure their capital is invested responsibly. ESG and sustainable investment has been one of the fastest moving areas in investment management for decades, and as such we continue to evolve our approach in the best interest of our clients. We will strive to be at the forefront of these developments as ESG becomes an ever more important part of the asset management industry.

View our Responsible Investment Policy

ESG insights

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.

Read our Momentum case study

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.

Our ESG Observatory

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.

"As fixed income investors we have the benefit of regular contact with company management, so our engagement can absolutely have an influence on policy. If as capital allocators we can nudge bond issuers towards more sustainable business models, then we'll do so."

Charlene Malik – Portfolio Management

TwentyFour is a prominent investor in European asset-backed securities (ABS) markets. From our experience the specialist structures and complexity associated with this asset class makes ESG data gathering more challenging compared to more mainstream bond markets, but we have worked hard with issuers on closing this data gap and have also extended our Observatory model to cover ABS-specific metrics. We believe this proprietary ESG work is unique in the European ABS space, and it is well regarded among our clients and other market participants.

Read our ABS case study

Our scoring system

As an active manager, we don’t rely solely on external ESG data providers or a standalone ESG team within our business to provide our portfolio managers with an ESG score. For true ESG integration we believe portfolio managers must be accountable for judging how ESG factors will impact the value of their investments over time.

We see this more active approach to ESG scoring as particularly important in fixed income, where commercial ESG data coverage is not as comprehensive as it is in the equity markets.

The TwentyFour ESG Score is therefore a unique measure that combines inputs from our ESG data partner with our own analysis.

Learn more about the TwentyFour ESG Score

Our active difference

The TwentyFour ESG scoring system is designed to specifically suit our active management style because it enables us to place a greater emphasis on more nuanced ESG factors such as Engagement, Momentum and Controversies.

Engagement

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 influence corporate policy by engaging with management on an ongoing basis. We publish a quarterly summary of all our engagements with bond issuers here (under Principle 9), along with details of any resulting investment decisions.