The Fund leverages Aegon AM’s proprietary research methodology and multi-decade expertise as active owners of sovereign debt. The managers utilise country-level analysis and top-down assessments to optimise regional and SDG-specific concentrations.

Aegon AM bases its sustainability methodology on the works of the Bertelsmann-Stiftung and Sustainable Development Solutions Network (SDSN) partnership, sponsored by the United Nations. The transparent scoring methodology is based on more than 100 indicators per country and covers 172 countries across the world.

Aegon AM is proud to work with GEFI to introduce the new fund at COP26. The alignment of sovereign portfolios with a global sustainability agenda can help to facilitate responsible capital allocation, which has a long-term social and environmental impact.

Aegon AM is a global leader in responsible investment. It launched its first ethical fund in 1989 and today manages US$245 billion in specialist responsible investment portfolios across its fixed income, equity, real assets and multi-asset investment platforms.

Aegon AM believes that incorporating sustainability alignment into a sovereign bond investment strategy can help to mitigate risk, promote sustainable growth and deliver competitive long-term performance for investors in the Fund.

The strategy contributes to the UN SDGs across three key pillars of Improving Wellbeing, Improving Inclusion, and Supporting a Just Transition. Focused on seven SDGs of 1 (No Poverty), 2 (Zero Hunger), 3 (Good Health and Well-Being), 4 (Quality Education), 5 (gender Equality), 6 (Clean Water and Sanitation) and 10 (Reduced Inequalities), the strategy departs radically from the traditional approach. Rather than analyse companies according to the familiar sectors – such as financials, industrials, consumer products or technology – the strategy’s managers organise their research around these SDG goals. A company will be scrutinised in terms of the contribution it can make to the goals. Focusing on the SDGs rather than the traditional sectors gives a different perspective to the portfolio, tuning out all the traditional sectoral noise to give a pure play impact approach and concentrate on outcomes.

Both GEFI and Martin Currie’s Impact team have a shared belief in the pivotal role private finance, in particular equity markets, can have in solving both societal and wider sustainability challenges. It is a privilege to partner with GEFI to share learnings and work towards delivery of SDGs.

To Martin Currie, stewardship and sustainability and financial returns are fundamentally intertwined.

Stewardship is a critical element of Martin Currie’s philosophy and is at the heart of all its investment strategies. Martin Currie has been a leader in all aspects of stewardship and sustainability since 2009, when it became an early signatory to the UN-supported Principles for Responsible Investment (PRI). Since then, Martin Currie has been consistently rated highly by the PRI and was one of the first asset managers to sign up to the ambitious new UK Stewardship Code.

Martin Currie’s teams have a clear focus on sustainable outcomes. To achieve the greatest impact, governance and sustainability analysis, engagement and voting should, in Martin Currie’s view, be conducted by those making investment decisions rather than being outsourced. A dedicated Stewardship, Sustainability & Impact team, enable investment teams to have fully informed views of the sustainability risks, opportunities and impacts that companies face or create.

Martin Currie believes that advancing fairness of social opportunity and narrowing the equality gap can help empower individuals and deliver greater levels of human equity. However, over recent years, we have observed a structural increase in inequality and a widening gap between the goals and delivery of key societal development objectives.

In addressing these issues, Martin Currie believes the private sector and equity markets have a large part to play both as involved corporate citizens and in providing products and to facilitate improvements in equality of opportunity and equality of outcome. Companies with products that truly make a difference in people’s lives have the opportunity to exploit long-term profit pools generated by true, ongoing societal need. Those that take their responsibility to society seriously and endeavour to treat employees, customers, and the community with respect and dignity may also find they have a competitive advantage over those who do not.

The strategy aims to take advantage of opportunities presented by investing in companies whose products and services positively impact fundamental human needs and create the conditions for advancements in equity. Active ownership is a fundamental tenet of the strategy. Structured engagement on company-specific impact goals, sustainability issues and business topics is used to accelerate impact and drive standards in sustainability related behaviour. The strategy leverages Martin Currie’s strong track record within sustainability thought leadership and business integration and is aligned with our corporate purpose of ‘Investing to Improve Lives’.