Josh Linder, credit analyst at APG Asset Management US Inc., participated in a video interview at Nareit’s ESG Forum 2019 at the Hyatt Regency Coconut Point in Bonita Springs, Florida.
As a leading long-term, responsible investor, sustainability is a core part of APG’s decision-making process across asset classes, Linder explained. APG uses an internally-derived ESG scoring model that helps identify companies as either ESG “leaders or laggards,” he added.
APG does not rule out investing in “laggards,” Linder said. If a company looks to be a strong investment, APG will invest in it and seek to improve its ESG profile.
Turning to green bonds, Linder said APG would like to see more granular impact reporting. In addition, APG would like to see that the types of projects financed are not one-offs but rather part of a broader strategy.
Linder noted that issuing green bonds does increase investor diversification. Due to the limited number of green bonds being issued, “when a company issues a green bond we’re always going to take a look at that issue,” he said.
Issuing green bonds also sends a signal that a company is considering ESG issues in their long-term planning, Linder said. “To us, that’s a sign of management quality.”
Linder added that in many cases, green bonds are oversubscribed, which may help issuers in more turbulent market times.