Octagon believes the integration of environmental, social, and corporate governance (ESG) risk factors enhances the research process and better allows us to adhere to the fiduciary duty we owe each client. 

Principles for Responsible Investment  

Octagon has been a signatory to the Principles for Responsible Investment (PRI) since 2020. As a signatory, we are committed to upholding the PRI's six Principles, including reporting on our activities and progress towards implementing the Principles. 

Click here to view Octagon's 2023 Public Transparency Report

ESG Integration in our Investment Process

We believe analyzing ESG factors can enhance our ability to assess a borrower’s creditworthiness, and thus we have integrated ESG considerations into our credit research and risk monitoring processes.  

  • Octagon does not generally negatively screen investment opportunities, however, we adhere to exclusion criteria for some funds, and for certain separate accounts at the request of the underlying client.1 
  • Octagon’s Investment Research Professionals utilize various information sources to evaluate ESG considerations as part of their credit diligence process for most new loan and bond purchases. Material ESG considerations must be disclosed in written credit memos when presenting an investment recommendation to the Investment Committee.
  • Octagon contracts with the Value Reporting Foundation to license and use the SASB Standards Disclosure Topics to help standardize the diligence process when evaluating financially material ESG considerations for issuers across different sectors.2
  • Octagon is a supporter of the ESG Integrated Disclosure Project ("ESG IDP"), seeks to promote completion of the ESG IDP Template by borrowers in our marketplace, and has incorporated the use of the ESG IDP Template as part of the investment due diligence process.

Click here to view Octagon's ESG Policy

1. While certain Funds or Accounts adhere to specific ESG-related restrictions, Octagon does not market any Funds or Accounts or represent its general advisory services (including but not limited to management of U.S. and Cayman-domiciled Clients) as “ESG Compliant,” “Green,” or meeting any particular ESG-related regulatory standards. Certain legacy and new investments are not subject to a formal ESG review process. Accordingly, portfolios managed by Octagon hold positions that have not been subject to any ESG-focused evaluation.

2. In October 2021, Octagon contracted with the Value Reporting Foundation (the “VRF”) to license and use the Sustainability Accounting Standards Board (“SASB”) Disclosure Topics to help standardize the diligence process when evaluating ESG considerations for issuers across different industries and sectors. Effective August 1, 2022, the VRF consolidated with the International Financial Reporting Standards Foundation (the “IFRS® Foundation”) to form the International Sustainability Standards Board (the “ISSB”). At that time, the SASB Standards became materials of the IFRS® Foundation.

Stewardship and Engagement Efforts

Octagon strives to contribute to the broad improvement of responsible investment (RI) practices by working with our investors in support of their own ESG-driven initiatives and reporting requirements, engaging with management teams to enhance our Investment Team’s ability to analyze ESG risks and opportunities presented by the issuers in which we invest, encouraging such issuers to improve their ESG risk management, be more transparent, and develop more sustainable business practices, and actively participating in industry-wide efforts to promote ESG and RI across the loan and CLO markets. 

Click here to read Octagon’s Stewardship and Engagement Policy

  • Octagon is a member of the Loan Syndications and Trading Association's (LSTA) ESG Committee, comprised of LSTA members ad buy-side participants in the loan market
  • Octagon is a member of the PRI's Global Policy Reference Group, which seeks to strengthen public policy engagement on RI topics and encourage greater alignment between RI commitments and public policy efforts.

When in the best interest of Octagon or our clients, we will seek to engage in formal collaborative engagements, such as the following initiatives prompted by the PRI:

  • Octagon is one of 65 organizations to endorse the statement, which was developed jointly by the World Business Council for Sustainable Development (WBCSD), the Principles for Responsible Investment (PRI), and the International Federation of Accountants (IFAC).
  • Octagon is one of 93 organizations to sign the joint letter by Eurosif - The European Sustainable Investment Forum, EFAMA, Institutional Investors Group on Climate Change (IIGCC), Principles for Responsible Investment, and United Nations Environment Programme Finance Initiative (UNEP FI), calling on the European Commission to uphold the ambition and integrity of the first set of European Sustainability Reporting Standards (ESRS). 

Governance and Accountability 

  • Octagon’s ESG Committee is responsible for overseeing the implementation of the Firm’s ESG policy and for evaluating the Firm’s progress with respect to ESG matters. Octagon’s ESG Committee is comprised of senior members of the Investment, Compliance & Investor Relations Teams.  Sean Gleason (Portfolio Manager) and Erin Crawford (Managing Director, Investor Relations) serve as Co-Chairs of the ESG Committee. 
  • Andrew Gordon (Executive Chair) and Sean Gleason serve on the CHL Sustainability Leadership Group, which was formed to deliver "top-down" consistence, governance and leadership on ESG-related issues and climate-risk efforts across CHL operations (including Octagon and other Conning affiliates).3

3. Conning, Inc., Goodwin Capital Advisers, Inc., Conning Investment Products, Inc., a FINRA-registered broker-dealer, Conning Asset Management Limited, Conning Asia Pacific Limited, Octagon Credit Investors, LLC, Global Evolution Holding ApS and its subsidiaries, and Pearlmark Real Estate, L.L.C. and its subsidiaries are all direct or indirect subsidiaries of Conning Holdings Limited (collectively, “Conning”) which is one of the family of companies whose controlling shareholder is Generali Investments Holding S.p.A. (“GIH”) a company headquartered in Italy. Assicurazioni Generali S.p.A. is the ultimate controlling parent of all GIH subsidiaries.

 

CarbonNeutral® Company Certification4

In 2021, Conning Holdings Limited and its subsidiaries, including Octagon3 (together, “Conning”) achieved CarbonNeutral® company certification indicating that the firm’s net greenhouse gas emissions are zero for a defined duration. Conning is certified carbon neutral through the use of high-quality instruments, in accordance with The CarbonNeutral Protocol and the GHG Protocol Scope 2 Guidance. All credits adhere to standards approved by the International Carbon Reduction and Offset Alliance (ICROA). To achieve this certification, Conning works with leading experts on carbon neutrality and climate finance, Climate Impact Partners. As part of this certification, the firm’s global operations complete an independent assessment of their greenhouse gas emissions. Conning has been carbon neutral across its operations since September 1, 2020, with its current certification active through August 31, 2024. Conning pays for its annual emissions assessment and the carbon credits to offset the verified assessment but does not pay directly for the certification.

At this time, to meet its carbon neutral goal, Conning has established an offsetting program that finances several projects that support the transition to a low carbon global economy. All projects are independently verified to assure emissions reductions are occurring. The deployment of carbon credits is the first step in a journey as the firm continues to examine how to reduce its carbon footprint. 

  
 Certified Carbon Neutral

4.  The CarbonNeutral® Company Certification does not reference portfolio investments held in Octagon client accounts.