The ESG Phenomenon: Brown Advisory

Shirin Aguiar Reporter London 25 February 2022

The ESG Phenomenon: Brown Advisory

Developments in and around the ESG investment space.

Independent global investment manager Brown Advisory has introduced a new framework for analysing sovereign (government) bonds against ESG criteria.

The framework allows Brown Advisory to provide clients with exposure to international sovereign debt – the largest sector in fixed income with $60 trillion in outstanding debt, including inflation-linked bonds.

The company said sovereign bonds are a less developed area in sustainable fixed income, as many ESG fixed income strategies only include labelled bonds, such as “green” and “social” bonds.

“More investors are seeking to incorporate ESG into investment decisions across asset classes to align their investments with sustainability goals, but sustainable approaches have remained relatively less developed in certain segments of the fixed income market,” Logie Fitzwilliams, head of international business and global head of sales at Brown Advisory, said. “We view sovereign bonds as an asset class with great potential to achieve progress on the United Nations Sustainable Development Goals. We are pleased to be able to offer our clients access to this attractive segment of the fixed income market.”

(This news service has a new programme, its Wealth For Good Awards, designed to highlight the work wealth managers are doing to drive change around the environment, society and governance. To find out more about the awards, click on this link. Winners, finalists and commended entries will be celebrated in May this year).

The ESG framework helps underpin Brown Advisory's new global sustainable total return bond fund, which was launched earlier this month and is managed by Chris Diaz, Ryan Myerberg and Colby Stilson.

The framework combines a quantitative methodology with qualitative analysis to build a holistic assessment of a country’s ESG risks and opportunities, which is comparable across countries yet able to capture subtleties and gradations, the firm said.

“The ability and reach of sovereign issuers to address key environmental and social challenges goes well beyond the scope of a corporate issuer, while sovereign ESG analysis also has the potential to reduce risk and allow us to identify compelling investment opportunities across both government and corporate bonds,” Ryan Myerberg, portfolio manager, Brown Advisory global sustainable total return bond fund, said.

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