ABSTRACT
This chapter provides an overview of the nature of bonds, discusses why governance, social, ethical and environmental (gsee) issues are relevant to corporate bonds, and describes how Insight Investment integrates gsee issues into the bonds investment process. It explains that bond-holders own an iou, rather than shares, in the company issuing the bond. The chapter shows the significance of good corporate governance and corporate management of gsee risks and opportunities to bond-holdings, not only in high-yield but also investment-grade stocks. Poor-quality governance and ineffective management of see risks increase the risk of corporate failure and thus represent a significant issue for investors. There is growing interest in the manner in which gsee is integrated into fixed-interest investment processes. Fund managers are often shareholders in the same companies that are its large bond issuers. Engagement on gsee issues in order to protect the interests of both bonds and equities clients can thus be conducted simultaneously.
