Article

ESG Integration in Middle Market Lending

15 October 2021
Invesco
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Integrating ESG considerations into private credit markets has its challenges, but we have embraced the opportunity, setting out to be leaders in this space over the last decade.

We have developed a proprietary process to engage, evaluate, educate and encourage our middle market issuers. As well as managing risk, this process allows us to increase awareness around the issues that matter most to us and our clients.

Direct Lending ESG philosophy
  • Engage: We have formed close relationships with our management teams and sponsors. This allows us to easily initiate ESG dialogues.
  • Evaluate: We carry out systematic ESG analysis to identify potential risks and opportunities. When carrying out evaluations, we leverage the expertise of the broader private credit platform.
  • Educate: We educate our management teams on the benefits of incorporating ESG policies into their culture.
  • Encourage: We develop discrete, actionable initiatives to encourage issuers to adopt ESG practices. Through regular engagement, we effect positive, tangible change.
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Investment risks

  • The value of investments and any income will fluctuate. This may partly be the result of exchange rate fluctuations and investors may not get back the full amount invested.

Important information

  • This is marketing material and is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable, nor are any prohibitions to trade before publication.

    Where individuals or the business have expressed opinions, they are based on current market conditions. They may differ from those of other investment professionals. They are subject to change without notice and are not to be construed as investment advice.