Spectrum’s parent company, Principal Global Investors, LLC (“PGI”), became a signatory to the United Nations Principles for Responsible Investment in 2010. As a wholly owned investment boutique of PGI, Spectrum has adopted the various UN Principles for Responsible Investment (“PRI”).

Principles for Responsible Investing

The six principles of PRI set a global standard for responsible investing as it relates to environmental, social and governance (ESG) factors. Spectrum is committed to responsible investing, underscoring our fiduciary responsibility to our clients, through the following principles:

  1. To incorporate ESG issues into our investment analysis and decision-making processes

  2. To be active owners and incorporate ESG issues into our ownership policies and practices

  3. To seek appropriate disclosure on ESG issues from the entities we invest

  4. To promote acceptance and implementation of the principles within the investment industry

  5. To work with other signatories to enhance effectiveness in implementing the principles

  6. To report on our activities and progress towards implementing the principles

ESG Integration in the Investment Process

Spectrum assesses the effectiveness of a company’s environmental, social and governance policies including, but not limited to, compliance with environmental regulations, management oversight and accountability, and labor and product standards. We integrate ESG risks and opportunities in our rigorous fundamental analysis of global banks and insurance companies, comprising most of our investable universe. We also review ESG factors for REIT, utility, telecom, energy and other non-financial companies. Our ESG findings can vary by country, industry and company.

Investment Recommendation

ESG stewardship is an important consideration in our analysis of an issuer. The inability or reluctance of management to address material ESG challenges could negatively impact key credit fundamentals, thus our investment recommendation.