July 2023 / INVESTMENT INSIGHTS
Looking Further Afield for Impact
Innovative Impact Credit Investing
The breadth, depth, and liquidity of the credit markets provide investors with a wide variety of impact opportunities. Some of these are already labelled by third parties as having a positive environmental and/or social impact.
But other impact credit opportunities may be under-researched or unlabelled, which doesn’t necessarily make them less valid. It’s an area where a diverse, consistent approach to identifying impact and deep, fundamental analysis can really pay off.
How do we invest in impact investments?
T. Rowe Price invests in impact investments with two goals in mind: we seek debt issuers that are on the right side of change—those seeking to deliver a positive environmental and/or social impact—but we also aim to generate attractive financial returns for our clients from these investments.
If we are investing further into the less-analysed areas of the credit markets to find impact opportunities, how do we ensure we’re comparing like with like? That comes down to the “five dimensions of impact” with which we seek to form our impact theses.
For each potential impact investment, we state upfront what the strategic goal of the impact is, who will benefit, by how much, the debt issuer’s contribution to the impact outcome, and the potential risks that could derail the impact thesis.
To illustrate how we are looking further afield for impact, below we highlight four recent examples of our innovative impact investing approach. These are cases where T. Rowe Price has delved deeper into the credit universe to find investment opportunities to create a holistic set of positive outcomes for our clients, alongside a financial return
Download the full insight here: (PDF)
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July 2023 / INVESTMENT INSIGHTS
Matt Lawton is a portfolio manager in the Fixed Income Division. He manages the Global Impact Credit Strategy and co-manages the US Investment Grade Corporate Bond Strategy. Matt is a vice president and member of the Investment Advisory Committees for the Corporate Income, New Income, and Ultra Short-Term Bond Funds, and he is a vice president of the Short-Term Bond Fund. He also is a member of the Fixed Income ESG Steering and Advisory and the ESG Committees. Matt is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.
