Social & Governance

ESG Factors

Foundation Credit believes that ESG factors will be a critical driver of value creation, positive results and alignment of interests across our clients, our employees, our communities and our investment strategies. We are, first and foremost, fiduciaries with the obligation to act in the best interest of our investors’ capital. As part of keeping their best interests in mind, we need to be sensitive to ESG factors so that we are mindful of building sustainable portfolios. Through direct dialogue, diligent research and dispassionate evaluation, we believe we can add to financial returns - as opposed to diluting them - in the pursuit of positive outcomes. We also believe that we can facilitate adoption and measurement of ESG factors across the markets in which we participate.

The firm believes that our focus on the municipal credit and infrastructure debt markets provides an exceptional opportunity to deliver positive ESG factors and absolute, risk adjusted returns to our clients.

Municipal and infrastructure investing naturally fit within an ESG framework, as our investment activity ultimately finances the delivery of essential government services and development of public infrastructure - the foundation for the economic growth, civic engagement and access to opportunity that enable local communities to thrive. Given the mission-driven purpose of most municipal borrowers, we believe that naturally associated ESG factors are highly correlated and pro-cyclical with resilient financial outcomes.

Our Identity

In conjunction with our investing approach, we believe that maintaining a reputation for integrity, ethical behavior and excellence is critical to the collaborative culture and positive working environment required for our team to the meet the high standards of care demanded by our clients, many of whom are themselves fiduciaries. We have established an industrial-grade governance framework to ensure that the firm’s operations consistently meet that obligation, which increasingly includes considering ESG factors.

Our Initiative

To clearly signal and guide our actions, we have formalized several initiatives which intentionally integrate ESG considerations into our investing practices within the broader US infrastructure debt and public finance markets. We expect that this process will generate long term economic value for our clients and result in real and positive changes.

Our Commitment

We are committed to evaluating ESG factors employing a multi-dimensional approach consisting of quantitative, qualitative and policy level assessments. Specifically, we have adopted the following to ensure a thorough incorporation of ESG factors:

Developing firmwide culture and awareness across our platform

  • A dedicated, firmwide ESG committee to identify, review and resolve ESG issues in our business and our portfolio investments
  • A firmwide annual ESG training requirement for all employees
  • Regular reporting to our clients and partners on relevant ESG factors of our business

Evaluating responsible investing within our strategies

  • Policies to guide ESG consideration in making investment decisions
    • ESG Committee establishment of distinct ESG policies for each strategy
    • Periodic reassessment of such policies by the ESG Committee
    • Periodic review to assess whether any specific investments raise ESG issues
  • Reporting / Monitoring of ESG Factors
    • Both FCO and FIO strategies obtain investment-by-investment, data-driven scores from an independent 3rd party
  • Reporting / Monitoring of UN SDGs
    • FCO obtains independent 3rd party mapping of investments to the relevant UN SDGs
    • FIO submits its proposed UN SDG mapping for each investment to the ESG Committee for review and approval

Industry advocacy and thought leadership