Best sustainability reporting by an asset or fund manager: medium and small (fixed income): Affirmative Investment Management

After picking up the award in 2020, Affirmative Investment Management (AIM) has once again secured the best fixed income sustainability reporting award as it continues to enhance and evolve its impact reporting approach.

In 2021, the $1.1 billion asset manager expanded its impact reporting coverage to 90% of its portfolios. This high level of coverage is predominantly a result of the firm focusing on in-house data collection, unlike many other asset managers, it claims.

"Project level data collection is a key area in which asset managers continue to struggle, evidenced by low portfolio coverage percentages," the AIM sustainability team told Environmental Finance. "At AIM we collect all impact data in-house and engage with issuers to obtain the project-level metrics we require for our impact reports. Part of our initial verification criteria requires us to review an issuer's commitment to transparency and reporting for an issuance to meet our verification threshold.

For this reason, AIM is consistently able to deliver 90% coverage for its portfolios. What is more, the AIM team said this in-house approach – while time-consuming – has the "additional benefit of initiating an in-depth annual review of our holdings".

AIM also aims to ensure its methodology is transparent to support standardisation of impact reporting by publishing its calculation methods. In 2021, its impact report included data on Scope 1, 2 and 3 greenhouse gas (GHG) emissions footprints and savings, Sustainable Development Goal (SDG) alignment, and Weighted Average Carbon Intensity (WACI).

AIM also co-created the Rockefeller Foundation-funded Carbon Yield Methodology (CYM) in 2016 to support impact reporting standardisation. In 2021, AIM enhanced its own use of the CYM by implementing a dynamic baseline leveraging the International Energy Agency (IEA) Stated Policy Scenario (STEPS).

In 2022, AIM is looking to incorporate EU Sustainable Finance Disclosure Regulation (SFDR) metrics into all its portfolio reports – a year ahead of when it is required to do so under the rules. The firm is also reporting project-level net-zero alignment for the first time alongside its existing avoided emissions analysis.