Our Impact / Responsible Investment Policy
We believe that we have both a fiduciary duty and a social responsibility to integrate environmental, social, and governance factors into our investment process.
ESG factors can constitute additional sources of risk and opportunities for return. Consideration and management of ESG factors can result in stronger risk-adjusted returns and preservation of capital for our clients. As a long-term investor, we also recognise that responsible investment practices contribute to the stability and sustainability of global economic and financial systems.
We believe that we have a social responsibility to support the stable transition towards long-term goals that contribute to a sustainable future for all. We support the UN Sustainable Development Goals and global net-zero emissions targets in alignment with the Paris Agreement. We encourage the companies we are invested with to align with these frameworks.
Gryphon is a signatory to the UN Principles of Responsible Investment (PRI).
The PRI is a leading global network of asset owners, managers, and service providers who are committed to responsible investing practices. The Principles provide a framework for incorporating ESG considerations into investment decision-making and ownership practices.
The six Principles, which we have committed to as a PRI signatory, are:
PRI signatories report on their responsible investment activities and progress towards implementing the Principles under the PRI framework. For transparency, we publish our latest PRI reports after each reporting cycle.
We have adopted an integration approach to sustainable investing, where ESG considerations are actively integrated into our investment process and decisions.
Given the complexity of securitised products, a holistic approach is required to effectively assess the sustainability of RMBS and ABS. Our framework assesses ESG factors across three key components of all transactions: the originator, assets, and deal structure. In the case of green, social, and sustainability labelled bonds, we also evaluate the green or social credentials of the issuance to ensure they are robust and effectively contribute to the green or social issues that they claim to address.
This framework includes our proprietary originator ESG assessment, which comprises a comprehensive questionnaire and scoring system to assess originators on a large range of material ESG issues. We believe that an active approach to ESG assessment is important in securitisation, where commercial ESG data coverage is not yet comprehensive, and the risks and opportunities differ to those encountered in equity markets.
For more information on our integration framework, refer to section 4.1 of our Responsible Investment Policy.
Effective stewardship practices, including engagement, advocacy, and collaboration, are an integral component of our responsible investment framework.
Engagement is a long-term active dialogue between investors and issuers on ESG issues. Engagement helps us to gather information, improve ESG disclosures, communicate our expectations, manage financial risks, and encourage positive change. As specialist structured finance investors, we engage with originators and servicers through a variety of channels and at all stages of the issuance cycle.
Gryphon collaborates with a range of stakeholders and market participants to undertake advocacy and contribute to improved management of systemic ESG risks. We participate in various collaborative initiatives and networks with like-minded peers and organisations, including the Australian Securitisation Forum ESG Working Group.