At Community Capital Management (CCM), we believe a fully integrated portfolio – one that includes environmental, social and governance (ESG) factors – can deliver strong financial performance while simultaneously having positive long-term economic and sustainable impact.
Our strategies utilize an innovative bottom-up approach to fixed income and equity investing combining the positive impacts of impact/ESG investing with rigorous financial analysis, an inherent focus on risk management, and transparent research. We provide impact investing solutions coupled with hands-on client service and report to clients on the multiple positive-based impact outcomes of their investments.
CCM is a signatory to the UN Principles for Responsible Investment (PRI) and believes the approach to responsible investment set out in this policy aligns well with these Principles. CCM’s approach to impact/ESG focus areas across assets classes is outlined in our 2019 Impact Themes Overview.
CCM invests in high quality, well-researched bonds that have positive societal impacts, requiring transparency into the specific use of the proceeds, and measurement of their anticipated corresponding impact.
Each of the bonds that we select for a portfolio must meet our stringent impact and financial criteria. Our impact criteria include:
- The use of the proceeds must positively impact a community in one or more ways. The areas of focus (what we call “impact themes”) include: affordable health/rehab care, affordable housing, arts & culture, disaster recovery, economic inclusion, education/childcare, enterprise development/jobs, environmental sustainability, gender lens, government supported communities, healthy communities, human empowerment, minority neighborhoods, neighborhood revitalization, rural community development, seniors/disabled, sustainable agriculture, and transit-oriented development.
- Transparency into the use of the bond’s proceeds. Without that transparency, we might never know whether the funds raised will provide the positive impact our clients are seeking. Our proprietary approach provides an added layer of investment transparency by detailing the use of bond proceeds and ensuring a full understanding of the programs being financed.
- Ability to quantify and report on the expected impact and/or explain the qualitative benefits of the investment. Quantitative data can include the number of jobs created or the number of affordable housing units as well as dollar amounts invested in impact themes. Qualitative research is the “story,” so to speak, which includes detailed explanations of what the security is financing. We report to clients on the multiple positive-based impact outcomes of their investments and offer institutional clients the opportunity to customize their fixed income portfolios by geographies or impact themes.
Like fixed income, we evaluate an equity security from an impact and financial perspective. We bring the same impact-focused approach to all asset classes. CCM uses a combination of third party and in-house research to determine where potential holdings fall within the following four-part segmentation:
- Strong Positive Impact: contains strong positive impact attributes – eligible for investment
- Moderate Positive Impact: has specific impact characteristics – eligible for investment
- Neutral Impact: maintains neutral posture toward ESG risk – eligible for investment
- Negative Impact: has excessive ESG related risk – not eligible for investment
CCM uses a proprietary impact tracking methodology that evaluates investments for alignment with our impact themes. Initially developed for CCM’s work in fixed income, the impact tracking is now applied to equities. Each holding is evaluated, researched, and tagged using these impact themes.
Proxy Voting Guidelines
As an active investor with a strong concern for corporate responsibility, we support communication with company management about organizational practices we would like improved. We engage in active, ongoing dialogue with clients to ensure that the views we express to corporations reflect our opinion and theirs as well.
We continue to withhold votes from all Board nominees for corporate boards that have fewer than two female directors. This conflicts with our views on adequate women/minority representation on corporate boards as outlined below. Based on our beliefs and client feedback, our current proxy voting plans are included below.
- Corporate boards’ that include adequate representation for independent, women and minority directors.
- Corporate disclosure, reporting, and transparency resolutions.
- “Say on pay” and similar efforts to give a company’s owners a voice in management compensation.
- Company benefits and/or compensation plans for all regardless of gender, race, age or sexual orientation.
- Policies that promote the voting power of the share classes offered to the public.
- Companies that recognize the carbon intensity of their businesses.
- Safe working conditions for all a company’s workers, suppliers, and contractors regardless of global location.
A full list of regulatory disclosures for Community Capital Management, Inc. are available by visiting: https://www.ccminvests.com/regulatory-disclosures/.