June 2023 / INVESTMENT INSIGHTS
T. Rowe Price Strategy Focus on Global Impact Credit
Strategy Summary
FEATURES
Our Impact Charter
The core tenets of the portfolio’s investment philosophy include:
1. Materiality
All our investments start with a security‑by‑security assessment of impact materiality. Our RI team defines our impact universe through careful screening; a deep understanding of ESG factors; industry‑specific, forward‑looking impact inclusion criteria; and an evaluation of the credibility of the ESG‑labeled bonds through our proprietary framework.
2. Measurability
Given our mandate’s dual nature, impact measurement is integral to the investment process. We quantify the alignment of every security with our three impact pillars and the UN SDGs. Additionally, each investment thesis embeds security‑specific key performance indicators (KPIs) as our analysts collaborate with the portfolio management team to define our investment thesis.
3. Additionality
We truly believe impact is achieved within an investment portfolio in more ways than simply investing in a company and capturing the economics and activities. Our approach involves directing fresh capital toward desired impact outcomes alongside impact‑oriented company engagements and the associated influence feedback loop.
Done well and in partnership with our fundamental and responsible research analysts and governance team, we believe this will potentially create benefits not only for our Global Impact Credit Strategy clients, but also for other investors.
4. Resiliency
Given the complexity and nonlinear nature of delivering impact and the patience it necessitates, adopting a long‑term and holistic view when investing to solve sustainability challenges is necessary. We integrate our security perspectives to identify, in our view, underappreciated impact and mispriced economic return improvement on a truly global, security‑by‑security basis.
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IMPORTANT INFORMATION
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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 member of the Investment Advisory Committees for the Corporate Income, New Income, Ultra Short-Term Bond, and Short-Term Bond Funds. He also is a member of the Fixed Income ESG Steering & Advisory and the ESG Committees. Matt is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.
