IR+M Engagement Report 2021

At IR+M, we believe engagement is an integral part of good credit analysis. Engaging with issuers on material themes allows us to gain additional insights into complex risks
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At IR+M, we believe engagement is an integral part of good credit analysis. Engaging with issuers on material themes allows us to gain additional insights into complex risks and opportunities not otherwise captured in traditional research or ratings. As a lender on behalf of our clients, engagement is an important facet of responsible investment stewardship, which complements our robust, bottom-up research process.


2021 ESG Engagement Summary


Environmental, Social and Governance (ESG) topics are especially nuanced and continue to evolve within industries and sectors. Our dynamic stewardship program allows our Investment Team to engage on and research the most pressing ESG risks and opportunities.


Our Investment Team focuses on fostering an effective and ongoing dialogue with management, which includes addressing ESG factors that drive long-term value. Our Investment Team also participates in collaborative engagements through credit rating agencies, investment banks, and other industry groups. As part of our bottom-up research process, engagements are conducted by our Research Analysts across asset classes, ensuring robust due diligence and ESG research is applied across holdings.


Our ESG research and proprietary ESG ranks are guided by our Key Issues Map, which outlines material risks and opportunities across asset classes, sectors and industries. Our Key Issues Map also guides our engagements by illustrating potential engagement topics for our Investment Team to raise with issuers. This year we have engaged across industries on several environmental and social topics.


Case Studies


Engagement Spotlight: Diversity, Equity and Inclusion (DEI) Engagement Program

  • DEI is at the forefront of many investors’ minds. Demographic changes, social protests, and updated attitudes towards social equity have promoted renewed focus on diversity, equity and inclusion (DEI). DEI is a pillar of human capital across sectors, yet there is a lack of robust data and consistent reporting to capture DEI’s various facets and variables within an organization.
  • We sought to collect more information with a direct, internal effort. Our Analysts engaged the firm’s top holdings across a variety of topics related to DEI: disclosure of racial and ethnic representation, initiatives and policies, pipeline efforts and management oversight. With no public standard for disclosing diversity, we categorized disclosure levels consistent with current trends.
    • Intersectional Data Disclosures: Disclosures consistent with issuers’ reported data in United States Equal Employment Opportunity Commission’s EEO-1 filings.
    • Detailed Data Disclosures: Includes the number or share (%) of employees who identify at least as Asian, Black, or Latinx/Hispanic.
    • Non-White Data Disclosures: Includes the number or share (%) of employees that are non-white (often described as ‘underrepresented’ or ‘people of color’).



  • Engaged across credit and securitized issuers: Our Investment Team engaged with the firm’s top holdings across asset classes, industries and ESG ranks.
  • Varying Diversity Disclosures: The varying levels of diversity disclosures are dispersed among engaged issuers, signaling a lack of standardization but increasing growth toward detailed and intersectional diversity disclosures.
  • DEI Matters: 94% of respondents have a DEI Commitment Statement, Initiative or Policy. A vast majority of these issuers also have a formal DEI Committee and/or Taskforce to carry out these policies.
  • CDO: 83% of engaged issuers have a Chief Diversity Officer (CDO) or equivalent. This is consistent with findings that the role of Chief Diversity Officer is one of the fastest growing positions in the field.
  • DEI Goal Setting: 83% of issuers with DEI Policies have linked goals or key performance indicators (KPIs). A majority also ties diversity and inclusion goals to executive performance reviews.


Engagement Spotlight: Diversity, Equity and Inclusion (DEI) Engagement Program


Areas of Improvement

  • Public Diversity Disclosures: About a third of engaged issuers publicly disclose intersectional diversity data, consistent with their EEO-1 filings. Increasing intersectional disclosures, reporting on workforce makeup by race, ethnicity and gender, would allow a more robust view of an organization’s workforce diversity.
  • Salary Transparency: The majority of issuers we engaged with do not disclose any form of salary transparency. Of those that do, several noted mandatory disclosures due to local regulations. We expect a continued push from regulatory bodies and markets to increase pay transparency.
  • Pay Gap Studies: A little over half of engaged issuers report conducting pay gap studies. Examining the interaction of renumeration and social variables such as gender, race, or ethnicity is a pivotal step towards pay equity.


As lenders, we believe that management teams that are focused on ESG issues are more likely to increase efficiency of resources, sustain enterprise value, and decrease event and credit risk. Therefore, incorporating ESG considerations into our analysis leads to a more complete understanding of potential issues, and we expect this to ultimately result in superior risk-adjusted returns over the long-term.


Engagement is an influential facet of our ESG research process and to the responsible stewardship of clients’ assets. Environmental, Social, and Governance themes will continue to evolve in markets and express varying levels of risks and opportunities. In order to capture value not otherwise found within ESG ratings, a robust research process that includes engagement will remain key

Source: Responses collected from the IR+M DE&I Engagement Questionnaire. The views contained in this report are those of IR+M and are based on information obtained by IR+M from sources that are believed to be reliable but IR+M makes no guarantee as to the accuracy or completeness of the underlying third-party data used to form IR+M’s views and opinions. This report is for informational purposes only and is not intended to provide specific advice, recommendations, or projected returns for any particular IR+M product. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from Income Research + Management.

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Data provided as of January 2, 2024
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