We believe that integration of Environmental, Social and Governance (ESG) factors in investment decision making is another significant shift in the Asian fixed income landscape. There has been a growing realization that asset owners must be responsible investors. By increasing the importance placed on ESG factors, corporates and other issuers can be influenced and persuaded to operate in more sustainable manners. More importantly, our research has shown that performance and sustainability are not mutually exclusive. On the contrary, we are believers in the long-term value of being able to identify companies with improving ESG characteristics, which will be better equipped to attract capital and avoid potential financial risks down-the-line. A company’s commitment to sustainability (including good corporate governance) will allow it to better avoid defaults, and outperform its peers in the long run.