Perspectives

Washington — Globally, the inability to slow the spread of the novel coronavirus COVID-19 has resulted in an ongoing joint public health and economic crisis. As a result of ”stay-at-home” orders, end-user demand for emissions-intensive industrial, transportation and electricity applications has rapidly declined thus far in 2020, with signs of a sluggish recovery materializing only in some regions during Q3. Accordingly, absolute greenhouse gas (GHG) emissions have fallen.

Washington – British nobleman and contrarian investor Baron Rothschild once declared, “When there’s blood on the streets, buy real estate.” As we battle COVID-19 today, the updated mantra is more like: “When there’s turmoil on the Street, invest in your stakeholders.”

Washington - While the COVID-19 pandemic and the systematic failure to address racism have exposed disparities in economic opportunity and treatment under the law, they have also exposed vulnerabilities in our economy and forever altered investor’s perspectives on these issues as well. Many have called for stronger action to address systemic risks like inequality and racism but few have the history and expertise Calvert has engaging with companies and contributing to investor standards addressing these issues.

In this brief we discuss the key ESG factors on which Calvert evaluates companies with opioid exposure and our responsible investment approach to opioid-exposed companies.

Investors are commonly advised not to try to time the market. While specific peaks and valleys can be difficult to predict with precision, we do know that bull and bear markets will happen. Investors that take the long view have the potential to achieve sustained gains overall.

As factor-based investing grows, quality factors tend to be favored most by investors, given their consistent outperformance over the past five years. As Exhibit A shows, the Russell 1000 Quality Factor Total Return Index1 has outperformed the Russell 1000 Total Return Index2 over the one-year, three-year and five-year periods ended August 30, 2019.

Calvert tested the financial materiality of five gender diversity factors: (1) number of female board members, (2) percentage of female board members, (3) number of women in board leadership roles, (4) number of women named executive officers (NEOs) and (5) TruValue’s circumstantial score related to diversity and inclusion news/issues over a three-year period.

As growing numbers of companies embrace sustainability practices, the question of whether those efforts can provide a competitive edge through strategic differentiation becomes increasingly important.

Shareholders generally get the right to vote on key corporate issues at the company's annual meeting of shareholders. Since most investors may not be able to attend, companies offer an opportunity to vote by sending ballots in advance that authorize officers of the company to cast their votes at the meeting in their absence. This process is known as proxy voting.

In this paper, we outline the Calvert approach to Responsible fixed-income Investing through performance, research, active engagement and impact. It's an approach that we believe can help sophisticated investors achieve their portfolio return objectives while working toward the laudable goals of the 2006 mission statement.