Strategy Insights

Invesco ESG Loan Investment Process Overview

9 May 2023
Invesco Fixed Income
Invesco Fixed Income
ESG Loan Investment Process

Invesco’s ESG approach to senior loans 

At Invesco, we manage roughly USD 38.6 bn1 in senior secured bank loans for institutional, retail, and high net worth clients globally. Senior loans are an alternative asset class – they are privately arranged debt instruments (usually below investment grade). Investors look to add bank loans to their asset allocation strategies because they provide appealing returns through various economic cycles – they are senior in the capital structure, secured by all assets of the company, and they provide stable current income floating with prevailing interest rates. However, loans are not a security. Each loan has unique characteristics tailored to the underlying corporate issuer. Often senior secured loan issuers are private companies or may be sponsored by a private equity firm with no publicly available information. 

In 2015, Invesco Senior Secured Management, Inc. (ISSM) began to formally incorporate ESG considerations into its investment process as part of its consideration of credit risks for each issuer. However, investors began seeking more quantifiable approaches to better understand Invesco’s ESG considerations. Even more importantly, investors are expecting their bank loan managers to actively engage with management with respect to their ESG journey. ISSM’s proprietary ESG process provides investors with a rigorous multi-pronged approach to ESG.

Download our Investment Process Overview below to learn more. 

Download ESG Loan Investment Process Overview

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    While any Invesco fund referred in this page may consider Environmental, Social and Governance (ESG) aspects to better manage risks and improve returns, it is not bound by any specific ESG criteria. The fund may invest across the ESG spectrum and will not necessarily exclude companies with controversial business areas – such as those with significant revenues from coal, fossil fuel, nuclear power, weapons and tobacco – from the investable universe. Information used to evaluate ESG factors may not be readily available, complete or accurate. ESG factors may vary across types of investments and issuers, and not every ESG factor may be identified or evaluated. There is no guarantee that the evaluation of ESG considerations will be additive to the fund’s performance. 

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