November 2022 / INVESTMENT INSIGHTS
Impact Investing in Credit: Debunking Four Common Misconceptions
We attempt to debunk four popular myths about impact investing
Increasingly, companies are being measured not only by their earnings and cash flow, but according to the effect their activities have on the environment and society. As a result, credit investors no longer judge those companies solely on their risk and return characteristics, but increasingly by their external impact as well.
So-called impact investing is not a new asset class: it is a natural extension of environmental-, social-and governance- focused (‘ESG’) investment approaches in credit. The idea is to identify debt issuers on the right side of change— those that are seeking to deliver a beneficial environmental and social impact, as well as positive financial returns.
Impact investing has grown considerably in the past few years. But a lack of knowledge and several commonly shared misconceptions may discourage investors from considering this way of investing in credit.
In this article, we attempt to debunk four popular myths about impact investing, as well as showing how T. Rowe Price’s Global Impact Credit Strategy addresses them.
Read the full article (PDF)
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22 November 2022 / INVESTMENT INSIGHTS
Matt Lawton is a portfolio manager in the Fixed Income Division. He manages the Global Impact Credit Strategy and the Global Impact Short Duration 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.