Deep Dive: Do not neglect the G in ESG

Business models need to be sustainable

Chris Bowie, partner and portfolio manager at TwentyFour Asset Management, dives into ESG – governance.

As fixed income investors we have always told our clients that when an investor buys a bond with a buy-and-hold mentality, the best outcome is to receive your coupon payments and your principal back at maturity. This statement alone shows there is a symbiotic relationship between fixed income investing and environmental, social and governance (ESG) considerations.  By definition, we need to invest in companies whose business model is sustainable as this ultimately drives the ability of such companies to pay coupons and repay principals. A company making short run abnormal profits because...