We are confronted by what increasingly appears to be an ever-worsening environmental crisis. The IPCC report holds that extreme heat waves that previously only struck once every 50 years are now expected to happen once per decade because of global warming, while downpours and droughts have also become more frequent.11
In 2015, countries formally agreed to take joint action on climate change in the form of the Paris Agreement. They agreed to a warming limit of 2.0°C or preferably 1.5°C versus pre-industrial levels and that emissions must be net neutral by 2050 to achieve the warmer goal.
As highlighted in the IPCC’s report, even these efforts are falling short of halting the warming of the earth’s temperatures and causing drastic results.
Companies and municipalities that target credible GHG reduction efforts while working expeditiously toward risk adaptation and mitigation as well as long-term climate resiliency can contribute to efforts to transition our world to a low-carbon economy while sustaining the financial interests of their bond holders.
Engagement with bond issuers, SMEs, and industry organizations—like our work with Climate Action 100+--gives us opportunities to better understand bond risks, to identify issuers making authentic efforts to manage risks, and to contribute to their efforts by sharing knowledge we develop in our research efforts across the bond markets.
We take this responsibility as sustainable investors seriously and are committed to its continuation.
DISCLAIMERS: This report is limited to the dissemination of general information about Breckinridge Capital Advisors (“Breckinridge”) and should not be construed as a solicitation or offer of Breckinridge services or products or as legal, tax or investment advice. The content is current as of the time of writing or as designated within the material. All information, including the opinions and views of Breckinridge, is subject to change without notice. No assurances can be made that any estimates, target or projection will be accurate or prove to be profitable; actual results may differ substantially.
Some information has been taken directly from unaffiliated third-party sources. Breckinridge believes such information is reliable but does not guarantee its accuracy or completeness. Any third-party websites included in the content has been provided for reference only.
While Breckinridge believes the assessment of ESG criteria can improve overall credit risk analysis, there is no guarantee that integrating ESG analysis will improve risk-adjusted returns or lower portfolio volatility over any specific time period, or outperform the broader fixed income market or other strategies that do not utilize ESG criteria when selecting investments. All investments involve risks, including the loss of principal.
As a certified B Corp, Breckinridge must meet a minimum assessment score and pay certification fees. A certified B Corp is a for-profit organization that has been certified by B-Lab, a non-profit company that measures a company’s governance, social, and environmental performance against standards set by B-Lab’s impact assessment. Five conditions define certified B Corps: accountability, transparency, performance, availability, and certification fees. (https://bcorporation.net/about-b-corps)
Breckinridge is a Massachusetts benefit corporation, which is a legal structure that allows the firm to consider all stakeholders, not simply shareholders, in its decision making and pursuit of a general or specific public benefit. (https://benefitcorp.net/businesses).