NB Global Monthly Income Fund | ESG

As an active manager, we have a long-standing belief that material environmental, social and governance (ESG) factors are an important driver of long-term investment returns from both an opportunity and a risk-mitigation perspective. Therefore, we take a comprehensive approach toward managing client assets, including the integration of ESG criteria into our investment processes. We also understand that for many clients the impact of their portfolios is an important consideration in conjunction with investment performance.

From our first application of “avoidance screens” in the early 1940s to the launch of our U.S. Sustainable Equity team in 1989, Neuberger Berman has been at the forefront of integrating ESG factors into investment processes. Today, we continue to innovate, driven by our belief that ESG factors, like any other factor, should be incorporated in a manner consistent with the specific asset class, investment objective and style of each investment strategy. ESG factors can be employed in a variety of ways to help generate enhanced returns, mitigate risk and meet specific client objectives within a portfolio. We believe that our approach, which is focused on maximizing results for our clients, can also support better-functioning capital markets and have a positive impact for people and the planet.

Neuberger Berman is a signatory to the Principles of Responsible Investment and has an ongoing commitment to strengthening and refining its environmental, social and governance (“ESG”) approach, see the Investment Manager’s website for further details at https://www.nb.com/en/global/esg/philosophy.

The Investment Manager incorporates an ESG assessment into its internal credit ratings for non-investment grade credit. Its approach is to consider the valuation implications of ESG risks and opportunities alongside traditional factors in the investment process and to focus on companies or themes, which are judged to be ‘better’ according to environmental, social and governance characteristics. Further details of Neuberger Berman’s Principles for Responsible Investment are given on its website at www.nb.com/pages/public/en-gb/principles-for-responsible-investment.aspx

In addition to thoroughly understanding a company from a financial point of view, the analysts at Neuberger Berman focus on assessing the material ESG risks and opportunities of the company through bottom-up fundamental analysis and the completion of an NB ESG Scorecard. ESG research is a critical component of the investment team’s fundamental research process that determines Internal Credit Ratings. The team believes that the integration of ESG factors in its investment process adds value as it helps to identify risks generally not captured by traditional corporate credit analysis and to analyse the non-financial aspects of businesses. 

Principles for Responsible Investment (“PRI”) (https://www.unpri.org/) has awarded Neuberger Berman an A+ for its fixed income ESG integration

Differentiated ESG Process:

• ESG is a critical component of the fundamental research process that determines Internal Credit Ratings
• ESG analysis is performed by the Non-Investment Grade Credit research team, not outsourced to a centralized group within Neuberger Berman or third party ESG rating service
• Proactive engagement with issuers to enhance disclosure, improve ESG analysis, and effect positive change
• Quarterly ESG Review with Credit Committee
• Performance attribution is monitored to determine the impact of ESG analysis