Listed Debt

What is a Listed Debt?

Listed debt refers to the borrowing undertaken by corporations, typically issued as bonds. Unlike private debt, bonds are traded on public markets, making them part of the conventional investment categories alongside stocks. The correlation of public debt with other public markets varies depending on the economic environment and interest rate movements. Furthermore, listed debt frequently comes with a fixed coupon, providing a predictable income profile. The liquidity of listed debt makes it an attractive option for those looking to diversify their impact portfolios while maintaining flexibility with regards to the investment horizon.

Our Listed Debt Approach

Our approach to listed debt includes as an integral part a profound ESG screening and a targeted impact analysis of portfolio companies. The ESG screening primarily aims to eliminate risk factors that have a negative influence on the environment, social issues, and corporate governance (ESG) from our investment portfolio. responsAbility goes a step further: In addition to eliminating negative influences, we also focus on identifying and investing in leading companies that generate a measurable positive impact. These companies are characterized by their commitment to strong decarbonization efforts, which goes beyond mere avoidance; it supports and accelerates the transition to a low-carbon economy.

Our proprietary bond selection and scoring methodology therefore considers a corporate’s decarbonization potential and activities, the macro environment, the sector outlook but also idiosyncratic risk of the company. By integrating these comprehensive analyses, we strive to consistently outperform our benchmark and offer investors attractive opportunities in the corporate bond space that also drive meaningful environmental impact.

Listed Debt and Impact

As an accessible and liquid asset class, listed debt represents a valuable avenue for capital deployment in initiatives that prioritize positive societal and environmental outcomes. Unlike equity investments, where capital typically finances share acquisitions without injecting new funds into a company, listed debt instruments such as green bonds or sustainability-linked bonds directly bring fresh capital to firms. This aspect is critical because it enables the actual funding of new or ongoing initiatives, making the investment directly impactful. In contrast to private equity or direct loans, listed debt is available on public markets, making it more accessible to a broader range of investors. This accessibility is crucial for mobilizing large-scale capital towards impact investing. By investing in listed debt such as green or corporate bonds, investors can directly finance projects or companies that are making tangible strides in areas such as transitioning to net zero emissions. Such instruments not only meet the growing demand of investors for sustainable investments but also encourage corporate and governmental focus on sustainability goals.