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Navigating the Sustainability Shift: A Challenge for Fixed-Income Investors
Jun 12, 2024
Fixed-income investors face challenges balancing fiduciary responsibilities with sustainability commitments, requiring strategies to manage liquidity, tracking error and high trading costs. MSCI's glidepath-index methodology helps investors transition bond portfolios towards sustainability goals by reinvesting cash flows into issuers aligned with specific objectives, such as higher ESG ratings or lower emissions. Historical simulations of the glidepath methodology demonstrate significant improvements in ESG scores and emissions reductions across various fixed-income segments, including high-yield and investment-grade bonds.
Glidepath mechanics
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Research authors
- Jarrad Linzie, Managing Director, MSCI Research
- Subhajit Barman, Vice President, MSCI Research
- Sushil Torne, Senior Associate, MSCI Research
- Sameer Bhatt, Executive Director, MSCI Research
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