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Enhanced ESG Emerging Markets Debt
Building on the ESG analysis that is part of all of our strategies, our Enhanced ESG strategies are designed to offer further reduction in ESG risks.
Stone Harbor’s traditional EMD strategies integrate analysis of ESG factors and engagement with issuers into our fundamental investment process. The Enhanced ESG strategy takes this further through negative screening of countries and corporates, being benchmarked versus dedicated ESG indices, and typically maintaining a larger weight to Green Bonds, for example. Our Enhanced ESG strategy is available for both emerging markets sovereign and corporate investments.
|Objectives||How we aim to achieve them|
|Strong investment returns||Apply our disciplined investment process based on rigorous fundamental credit analysis|
|Limit exposure to ESG risks||Highlight specific ESG factors in fundamental credit analysis with a focus on anticipating future changes
Reduce exposures to countries and companies with weaker ESG scores
Avoid exposure to countries and companies with the weakest ESG scores
Maintain average portfolio ESG scores that generally exceeds the respective traditional benchmark’s ESG score
|Incentives for issuers to improve ESG performance||From an issuer perspective, the link between ESG scores and index weight may promote a growing investor base as ESG scores improve||Foster engagement with issuers on ESG issues||Incentivize issuers for progress on ESG performance which we believe tends to result in lower financing costs
Encourage issuance of Green Bonds where applicable