Federated Hermes video testing

To unlock sustainable fixed income with real-world outcomes you need the right combination of expertise, ESG integration and stewardship. Here, Federated Hermes investment teams answer key questions around what it takes to achieve true sustainability in fixed income.

Question one: How does engagement in fixed income work in practice?

It’s a myth that engagement in the realm of fixed income is less effective than for equities. Our multi-decade experience of deep engagement with companies issuing debt illustrates this – and we have a solid track record that underlines how effective engagement can be in influencing company behaviour.

Our in-house stewardship team and engagers – including a global engagement team dedicated solely to fixed income – are a critical element of integrating ESG considerations into our investment process. Engagers and credit analysts work closely together; sharing views and opinions; and attending company meetings. This allows us to develop a much better real-time understanding of management’s thinking, culture and processes, as well providing an opportunity to encourage further progress on the path towards sustainability.