Goldman Sachs Asset Management (GSAM) announced today the launch of the GS Global ESG Enhanced Income Bond Portfolio, designed to provide investors with an ESG-aligned fixed income product that accesses the broad global fixed income opportunity set —corporate bonds, securitized credit and emerging market debt — to deliver high income and long-term capital appreciation.
Kathleen Hughes, Managing Director, GSAM client business, said:
“The COVID-19 pandemic has amplified investor focus on environmental, social and governance risks. Our commitment to ESG remains resolute. We believe the GS Global ESG Enhanced Income Bond Portfolio meets a deepening need within the investment world to achieve investment objectives with thoughtful consideration of ESG factors.”
According to GSAM, securities held in the portfolio will be identified through rigorous fundamental research that integrates ESG analysis, including sector and company exclusions, such as tobacco and other business models that are inconsistent with widely-accepted norms and values, including companies that violate the United Nations Global Compact principles. The bonds will also be screened for revenue streams associated with negative social and environmental factors, such as companies that derive significant proportions of their sales from thermal coal generation. Additionally, GSAM stated that it will exclude issuers with low ESG scores, based on proprietary ratings.
Jonathon Orr, Global Fixed Income Portfolio Manager, said:
“The GS Global ESG Enhanced Income Bond Portfolio makes a conscious effort to avoid companies that in our view exhibit weak ESG profiles. We believe this approach can contribute to long-term performance.”
Ashish Shah, Co-chief investment officer of Global Fixed Income, said:
“We believe ESG analysis is critical for identifying 21st century business risks and ESG integration is therefore our fiduciary duty as an active asset manager. ESG is the responsibility of all investment professionals, not just those with ESG in their title.”
GSAM stated that the fund, which is a new sub-fund of the UCITS-qualifying, Luxembourg-domiciled Goldman Sachs Funds SICAV, is available to both institutional and retail clients across Europe.