Integrated approach

As fixed income specialists, we take a proactive approach to managing ESG and integrate ESG risk analysis across all our investment portfolios for applicable investments*. We have been analysing ESG risk in portfolios since 2013 and have developed proprietary tools and methods to support client responsible investment needs across the fixed income spectrum.

* Certain investment strategies, asset classes, exposure and security types do not integrate ESG factors, including but not limited to money market, buy-and maintain, passive, and certain third-party sub-advised strategies or certain currency or derivative instruments. Different strategies that integrate ESG factors will be at varying stages of implementation.

We focus our efforts with regards to both:

• New investments (pre-investments), and
• Existing investments (post-investment)

 
Incorporation of ESG factors occurs on many different levels:

• Issuer level, credit analysis to understand RBC BlueBay’s ESG risk exposure on an individual issuer by issuer level
• Sector level, as part of the issuer analysis to assess the material ESG risks for certain industries/sectors, and to what degree are there common ESG risks across sectors
• Portfolio level, portfolio characteristics and ESG investment risk exposures at a fund level
• Group level, oversight of ESG risks across RBC BlueBay’s portfolio strategies e.g. what is RBC BlueBay's investment risk exposure across all the investment teams?

At a RBC BlueBay level, the below ESG components are applied:

ESG integration

• Firmwide policies
• External ESG data
• Issuer ESG evaluation
• PRI signatory, other memberships & collaborations

Stewardship

• Engagement
• Proxy voting

Exclusions / negative screening (product based)

• Controversial weapons

ESG Exclusions (product based) / ESG Norms-based Screening (conduct based):

Full details of the ESG screening applied for BlueBay Funds and BlueBay Structured Funds.

RBC Global Asset Management, in collaboration with the University of Exeter Business School’s Sustainable Finance Centre, is proud to launch the RBC Global Asset Management Sustainable Research Programme. The two-year research programme is led by Professor Chendi Zhang, Director of the Exeter Sustainable Finance Centre, and will explore how climate risk exposure and sustainable finance impacts the risk-return trade-off of assets. We look forward to sharing our findings.