My-Linh Ngo, Head of ESG Investment at BlueBay Asset Management
Accounting for human rights dynamics is important to investing as its about having an understanding of the base norms expectations companies should be respecting and operating within.
Not managing this well can impact a company's social license to operate, impacting their brand and reputation, and the trust and confidence of its key stakeholders. So addressing human rights can help avoid downside risk, and that is particularly important for fixed-income investors. For us, it is about capital preservation, as our upsides are capped but the downside is unlimited.
Opportunities also comes from identifying those companies that are going to be winners. If an entity has a more active or progressive approach to human rights, it is more likely to be able to better anticipate, respond to, and be in tune with any changes in sentiment or expectations from customers or regulators.
If a company is better able to respond to those issues, we think it is more likely to be financially successful.
So, understanding how companies are addressing human rights can enable us to better identify the winners and hopefully avoid the losers.
For more on the "S" in ESG, watch our exclusive Three Minutes With interview with My-Linh Ngo by clicking below
This post is funded by Bluebay Asset Management
