CCM integrates impact considerations into its fixed income investment process with the goal of achieving competitive risk-adjusted returns while supporting positive societal outcomes aligned with one or more of its impact themes.
FIXED INCOME IMPACT APPROACH
CCM invests in bonds where the investment team has a high degree of confidence that the use of or intent of proceeds will generate positive societal outcomes aligned with one or more of our impact themes, or that the issuing entity supports at least one of these themes. Such determinations are based on internal research, issuer disclosures, and third party information where available.
1. Use of Proceeds Due Diligence
Impact bonds where the capital is financing positive societal outcomes at time of issuance. The investment team must have a high degree of confidence with:
- The use of proceeds and how it is supporting one or more of CCM’s impact themes.
- The use of proceeds and how it is having positive societal outcomes to people and communities.
Impact bonds where the capital is financing positive societal outcomes tied to future projects. The investment team must have a high degree of confidence with:
- The use-of-proceeds intent and how it supports one or more of CCM’s impact themes.
- The project selection criteria and process.
- The use of proceeds meeting its original intent and that the issuing entity is reporting in the stated time frame.
2. Issuer Due Diligence
The investment team must have a high degree of confidence with:
- The issuer and its track record.
- The issuer reporting and/or any supplemental third party research.
- How the entity supports one or more of CCM’s impact themes.
Bondholder Engagement
CCM may conduct bondholder engagement with public fixed income issuers on matters including disclosure quality and use-of-proceeds integrity. Our bondholder engagement serves as a proactive tool to enhance transparency and address long-term risks including meaningful societal impacts that traditional financial materiality frameworks may overlook. CCM’s investment team leads bondholder engagement efforts, engaging with sales desks or, when needed, escalating directly to issuers, including investor relations, treasurers, and bankers.
Fossil Fuel Free Framework
CCM applies a fossil‑fuel‑free framework that is focused primarily on the use of proceeds of fixed income securities.
- We may invest in a bond whose use of proceeds will be used to finance activities or projects in clean and renewable energy or other activities that may contribute to the transition to a more sustainable economy, even if the issuer’s revenue or profits are partially derived from the fossil fuel sector.
- We do not invest in bonds where the use of proceeds supports extracting, producing, processing, or refining the fossil fuels of oil, gas, and coal.
- We do not invest in bonds where the use of proceeds supports storage, transportation, exploration, or production of carbon-related fuels or energy sources.
CCM’s impact policy is for clients incorporating impact investing into their portfolios. Not all advisory accounts advised by CCM incorporate impact investing considerations. The application of CCM’s impact policy is governed by the client’s investment management agreement, which may not include its considerations.
Community Capital Management, LLC (CCM) is an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply a certain level of skill or training. The verbal and written communications of an investment adviser provide you with information you need to determine whether to hire or retain the adviser. Past performance is not indicative of future results. CCM has distinct investment processes and procedures relating to the management of investment portfolios for institutional clients. The firm’s strategies are customized, rather than model-based, and utilize an innovative approach to fixed income by combining the positive societal outcomes of impact investing with rigorous financial analysis, an inherent focus on risk management, and transparent research. Bonds are subject to interest rate risk and will decline in value as interest rates rise. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. A sustainable investment strategy that incorporates impact criteria may result in lower or higher returns than an investment strategy that does not include such criteria. Impact figures mentioned are approximate values. Opinions, estimates, forecasts, and statements of market trends are based on current market conditions and are subject to change without notice. Third party links, trademarks, service marks, logos and trade names included in this content are the property of their respective owners. The inclusion of a third party link is provided for reference and does not imply an endorsement or association with, or adoption of the site or party by us. Acceptance of this material constitutes your acknowledgement and agreement that the Advisor does not make any express or implied representation or warranty as to the accuracy or completeness of the information contained herein and shall have no liability to the recipient or its representatives relating to or arising from the use of the information contained herein or any omissions there from. For a full list of relevant disclosures, please visit https://www.ccminvests.com/regulatory-disclosures/