“Nothing in this world can take the place of persistence.”
Introduction: Persistence Toward Progress
Breckinridge Capital Advisors is a Boston-based, independently owned asset manager specializing in investment grade fixed income portfolio management. Working through a network of investment consultants and advisors, we serve a wide variety of clients ranging from high-net-worth individuals to large institutions.
Approach to this Report
This report offers an overview of our approach and commitment to sustainability both in our investment process and our business operations. Our strong conviction in the merits of environmental, social and governance (ESG) integration in our investment approach motivates examination and reporting on our own sustainable business practices. As such, in our 2018 Corporate Sustainability Report (CSR), we were one of the first 50 companies to report to the standards published by the Sustainability Accounting Standards Board (SASB). In 2019, in addition to SASB, we reported to the Global Reporting Initiative (GRI) core standards and the Task Force on Climate-related Financial Disclosures (TCFD) framework. We continue this reporting in 2021.
Like other investors and reporters, we are excited and encouraged by the advancements that came throughout the year in the field of sustainability reporting. The International Integrated Reporting Council (IIRC) and SASB combined in June 2021 to form the Value Reporting Foundation (VRF). The merger provides corporations and investors with a comprehensive sustainability reporting framework.
The consolidation continued in November 2021, as the International Financial Reporting Standards (IFRS) Foundation announced plans to create the International Sustainability Standards Board (ISSB). The IFRS oversees financial reporting across 140 countries. The ISSB will consolidate the VRF and the Climate Disclosures Standards Board (CDSB) to develop global sustainability disclosure standards.1
Consolidation of various sustainability disclosure organizations with the international standards-setting body recognizes the importance of consistent ESG reporting guidance. It also helps to elevate ESG to the same order of importance as traditional financial standards. Finally, for corporations frustrated by the number of ESG reporting standards and frameworks, the merger helps to simplify ESG reporting.
Once the merger is complete in mid-2022, the new organization will create a “global baseline of sustainability disclosure” that would include cross-industry and industry-specific standards that are expected to incorporate SASB’s work to date. The sustainability disclosure will also reflect the thinking of the World Economic Forum and the TCFD. The IFRS envisions the ISSB sitting between the GRI and financial reporting standards in a nested ecosystem as summarized below. As both an investor and a reporter, we look forward to these continued developments and more precise and consistent reporting over time.
Sustainability Reporting
This is the third year that Breckinridge's report has been prepared according to GRI Standards: Core Option.
This is the fourth year that Breckinridge has reported to the SASB framework.
This is the third year that Breckinridge has reported to the TCFD framework.
DISCLOSURES:
GRI 102-1
GRI 102-2
GRI 102-7
GRI 102-46
Governance of Sustainability
To have a true appreciation for this report and how engrained sustainability is in our culture, it may be beneficial to look at the governance of sustainability at the firm. Breckinridge is led by a Board of Directors which acts for the benefit of all stakeholders. As a Benefit Corporation, our Board includes a Benefit Director. The Board of Directors guides an Executive Committee that sets the strategic direction and trajectory of the firm and provides direction to departmental managers. Departmental managers are responsible for implementing operational initiatives.
The Board of Directors and Executive Committee monitor and/or approve strategic sustainability initiatives.
The investment process is managed by the Investment Committee. ESG risks—including climate risk—are integrated into the investment process as directed by our co-heads, Research, and our director, ESG Research.
The firm’s corporate sustainability efforts are led by our director, Corporate Sustainability, who works with departmental managers as appropriate to implement sustainability initiatives within our business operations.
Both the director, ESG Research, and the director, Corporate Sustainability, work closely with the Sustainability Committee, which serves as the steward of Breckinridge’s sustainability efforts and is entrusted with responsibility for broadening firm- wide awareness and participation in sustainability initiatives. The Sustainability Committee is chaired by the director, Sustainability. The Sustainability Committee recommends sustainability policies to the Executive Committee, departmental managers and the Board of Directors. After implementation, the Sustainability Committee monitors and reports on policies.
[1] “The Biggest Change in Corporate Reporting Since the 1930s: How to Read IFRS Prototype Sustainability and Climate Standards,” Forbes, Mirchandandani, B. November 2021
DISCLOSURES:
GRI 102-18
TCFD Governance B
A Letter from Our President
We are borrowing this sentiment, attributed to Calvin Coolidge, our 30th President, to open our 2021 corporate sustainability (CSR) report. In this report, we will highlight progress we have made toward more sustainable operations. We also will openly acknowledge the substantial work we see ahead of us.
The theme of persistence towards progress is intrinsic to our firm. As a certified B Corp and a Massachusetts-registered Benefit Corporation, we are responsible for measuring our own performance on key sustainability issues. Throughout this report, you will gain insights about our team’s commitment to fully understanding and improving how our actions affect all stakeholders: customers, employees, suppliers, and communities.
During 2021, we addressed a wide range of issues that help to constitute our sustainable business approach. In the summary and index sections of the report, you will find details on activities and measurements related to human capital, corporate citizenship, risk management in our technology and investment operations, business ethics, the client experience, our ESG investing activities, operations and supply chain management, and our sharing of intellectual capital through collaborations and publications, including our inaugural engagement report released last year.
We also focused on several initiatives related to our advancement of DEI. In addition, we entered into a new global asset management initiative intended to accelerate the pathway to net-zero greenhouse gas (GHG) emissions by 2050, in alignment with the Paris Accords. You will read more about these efforts in spotlight discussions included in the report.
A decade ago, Breckinridge embraced a leadership role when we integrated ESG analysis into our investment process. That was a time when few fixed income asset managers considered ESG risks. Our conviction guided development of risk frameworks that we use to evaluate ESG factors of bond issuers. A sense of accountability guided integration of sustainability into our own business operations.
Being committed to a goal means persisting in the journey toward it. Obstacles are inevitable and they must be overcome. When needed, course corrections must be made. Persistence enables leaders to advance along the path despite challenges, and to inspire others to follow. We aspire to building that legacy of persistent leadership at Breckinridge.
In past CSRs, we have often described the journey we are on and the roadmaps we follow to guide our progress toward sustainability. Throughout our journey, it is the people of Breckinridge—our employees and stakeholders—who help to drive the firm to achieve. It is their persistence that drives our collective progress. I have great respect for their efforts and sincere appreciation for their fine work.
As always, I also welcome your questions about our results and the progress we still plan to achieve.
Sincerely,
Peter B. Coffin
President
Breckinridge Capital Advisors
DISCLOSURES:
GRI 102-14