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In partnership with our investors, we are committed to leaving a legacy of impact investing, which assists in the process of lifting nations out of poverty.
Global Evolution, in partnership with our investors, is committed to leaving a legacy of impact investing, which assists in the process of lifting nations out of poverty.
As an emerging and frontier markets fixed income investment manager, we are on a dual mission to generate attractive returns for our clients whilst contributing to sustainability in the countries and companies where we invest.
Financing the debt that provides macroeconomic sustainability and goes into promoting productivity, and raising infrastructure, such as electricity production, health, water, security, transport, and school systems, has a significant impact on reducing poverty levels.
Our engagement with both governments and corporations in emerging markets involves active dialogue. We conduct country visits to engage directly with policymakers, discussing strategies for sustainable economic development, and we engage with issuers during global investor trips and through ongoing relationships with companies. We also participate in larger investor meetings thereby ensuring our investment decisions are informed and aligned with our sustainability commitments.
At Global Evolution we recognize the importance of Environmental, Social and Governance (ESG) considerations for investors and advisors globally and continue to help our investors achieve their individual ESG goals.
A strong, integrated, and active ESG approach has become a prerequisite for investment managers to operate in today’s market, but certainly also important selection criteria for many institutional investors. Through our quantitative research effort, we have found that there is a strong business case for considering ESG dynamics as part of the investment process.
Global Evolution is an active signatory of Principles for Responsible Investment (PRI), the UN Global Compact (UNGC), and the Task Force for Climate-related Change (TCFD). We frequently publish research on the relevant subjects of ESG dynamics, investment process integration, and reports on our progress annually:
In the PRI annual assessment 1), we achieved the top 5-star rating for our governance and strategy policy and for our confidence building measures. We also achieved 5-star rating for our ESG integration in our EM sovereign debt strategies as well as our EM Corporate debt. Get access to the full Summary Scorecard by clicking the link.
Global Evolution has a strategic commitment to ESG, which is a fully integrated part of the investment approach. ESG characteristics are applied quantitatively through proprietary applications and qualitatively through analyst research and positive engagement with investee countries and companies.
In terms of our quantitative ESG integration approach, we have incorporated data-driven ESG dynamics across our investment process through various proprietary quantitative models for bond valuations and proprietary sovereign credit ratings.
Consequently, for relevant emerging and frontier market countries, we construct proprietary ESG ratings as well as statistical valuation signals for sovereign credit spreads and currencies partly based on ESG dynamics.
Valuation models help us determine whether sovereign credit spreads and currencies in emerging and frontier markets are aligned with their true value by analyzing a range of economic, financial, and ESG factors. This ensures that we can identify opportunities where market prices may not fully reflect underlying fundamentals.
Rating models further support our process by providing timely insights into the creditworthiness of countries. It adjusts official credit ratings based on the latest data, including ESG dynamics, offering a more up-to-date view than traditional credit rating agencies. This approach allows us to stay ahead in understanding potential changes in a country’s credit rating, enabling more informed and proactive investment decisions.
Our investment approach is centred on positive screening, where we actively seek out opportunities for growth by integrating Environmental, Social, and Governance factors into our investment decisions. This process is especially crucial in emerging markets, where improvements in ESG can drive significant socio-economic development. We prioritize assessing the potential for progress, focusing on countries and companies that are on a positive sustainability trajectory.
Our positive screening process involves integrating ESG factors into our investment analysis to identify opportunities for growth, particularly in emerging markets where improvements in ESG can significantly contribute to socio-economic development. We assess countries and companies not just by their current ESG status, but also by their ESG momentum and potential for improvement.
By focusing on positive ESG momentum, we aim to identify and invest in entities that are making meaningful progress in sustainability. This approach allows us to make informed investment decisions that align with both financial goals and our commitment to ESG principles, ultimately contributing to the long-term performance of our portfolio.
Our investment approach also incorporates negative screening. Our proprietary sovereign ESG ratings are optimized through simulations of the several variables and weightings and only includes indicators with substantial influence on the sustainable economic and socio-economic development of countries. In that context, the ESG dynamics are linked to long-term sovereign investments through sustainable development.
Our corporate investment team undertakes qualitative assessments of companies of interest helped by a data-driven quantitative assessment that integrates individual E, S, and G indicators into the investment process. Through a selective exclusion process, we filter out countries and companies whose ESG performance does not meet GE’s ESG standards. This approach is designed to exclude cases where risks are exceptionally high and improvement seems unlikely.
For sovereign investments, we continuously conduct reviews that combines quantitative assessments of environmental regulations with qualitative evaluations of governance and human rights issues, alongside a thorough check against international sanctions. Similarly, companies are screened for involvement in controversial sectors and activities, with those failing to meet our ESG standards being excluded from our investment universe.
We believe we are at the forefront of ESG research and ESG investment integration for investing in both countries and companies. We continue to play an active role in the public domain through our ESG research agenda and our collaboration with the World Bank, the UN, and other relevant stakeholders.
Here you can learn more about how sustainability is a cornerstone in Global Evolution’s business philosophy
1) PRI annual assessment
Principles for Responsible Investment (“PRI”) is a group of signatories who have agreed to adopt and adhere to specific principles for responsible investment. PRI assesses signatories adherence in order to rate them. To be included in the Assessment Report, signatories report on their responsible investment activities by responding to asset-specific modules in the Reporting Framework. Each module houses a variety of indicators that address specific topics of responsible investment. Signatories’ answers are then assessed and results are compiled into an Assessment Report. Additional information regarding the assessment can be found here: www.unpri.org/signatories/reporting-and-assessment
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