Sage Advisory has launched an impact bond strategy, including issuer-labeled green, social, and sustainability bonds, offered as a separately managed account.
Green bonds tend to focus on solutions to environmental challenges, while social bonds usually address specific issues like access to quality medical care or gender inequality and sustainability bonds look at both social and environmental issues.
The investment manager said it will be vigilant on any companies that may be guilty of greenwashing. Andrew Poreda, Sage ESG research analyst, said the firm is ready to call out poor practices: “Sage’s stewardship of this SMA strategy will ensure transparency so ‘greenwashing’ does not occur. This should give investors confidence that their investments are making the direct impacts that they intended.”
“We are going to be there, watching and calling a spade a spade,” he said. “If a utility company says, ‘We’re going to issue a green bond’ and then uses the proceeds for something else or doesn’t follow through with what they said they were going to do, we’re going to call that out. And eventually, that’s not going be in our portfolio.”
Poreda said the firm can offer the product now because the market is more mature. “This is where Sage comes in as a separately managed account expert that can monitor and measure progress toward the stated sustainable goals.”
Sage president and chief investment officer said the strategy was for investors looking for sustainability and performance. “Not only is the strategy designed to deliver performance similar to that of conventional fixed-income strategies, but investors also get peace of mind knowing that their investment dollars are providing measurable impact.”