George Bishay

Portfolio Manager

Investing Responsibly: A case study on assessing credit risk

This case study on Pendal’s credit risk assessment based on ESG factors was published by the PRI — the world’s leading proponent of responsible investment — as part of their ESG in credit ratings initiative which aims to enhance the transparent and systematic integration of ESG factors in credit risk analysis.

In this case study, George Bishay, Portfolio Manager of the Pendal Sustainable Australian Fixed Interest Fund, shares his insights into the rationale for limiting exposure to credit issued by Coca Cola Amatil. The decision reflects long-held concerns over the social risks associated with high sugar and the consequences of structural shifts in consumer behaviours. This case study provides a timely illustration of the impact on corporate profitability from non-financial considerations and the value that can be added through integration of ESG assessments in credit analysis.

 

 Click here to view the case study.

 

This case study is included in Appendix 2 (pages 56-57) of the ‘Shifting Perceptions: ESG credit risk and ratings‘ report which explores the disconnects encountered when integrating non-financial risk assessments. The report delves into PRI’s findings on the challenges encountered by credit practitioners in integrating ESG-related risks, together with practice guidance on the implementation of risk assessments and engagement with credit ratings agencies.

This article has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and the information contained within is current as at June 19, 2018. It is not to be published, or otherwise made available to any person other than the party to whom it is provided.

This article is for general information purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient’s personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation.

The information in this article may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information in this article is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information.

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