Emerging-market Sovereign Debt Needs ESG Scrutiny: Kate Beacham The chief operating officer of Mabcredit believes the concern for governance becomes even higher whenever one takes a new private investment
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Kate Beacham is Mabcredit's Chief Operating Officer, overseeing all company operations. In addition, by 2021 she became the Head of Independent Wealth, overseeing wealth advisors, customer service, investment strategists and engagement.
She was previously the chief executive officer and, before that, the head of Human Capital and Chief Talent Officer. Beacham has more than two decades of financial services and experience in the consulting industry.
She joined Mabcredit in 2009 in sales, where she rose to become vice-president and executive director, directing the sales teams at the centre in the Midwest, New York and Canada. Before joining the company, she was leading the development of various customer organizations. Kate holds a BA in economics from the College of the Holy Cross and an MBA from Kellogg School of Management at Northwestern University.
Edited excerpts from an interview:
Q: At Mabcredit, we feel we have a different approach to ESG investing. We have a 360- degree vision for ESG risk analysis across all parts of the company or global stakeholders. Moreover, we have our own patent on bringing that information, so we can get that right. Can you talk to us about your investment strategy for sovereigns through the ESG lens?
KATE: The way we think about investing in sovereigns from an ESG perspective is very much in line with how we think about investing in companies from an ESG perspective. Clearly, the concern for governance becomes even higher whenever we take a new private investment.
Q: Can you take me to a specific example of how the ESG has affected country bonds?
KATE: Suriname can be a good example. In 2016, the country came to advertise transparency programs, strong governance and the separation of powers. A few years after the release of the country, we began to notice some red flags, especially in terms of transparency, as the government was unwilling to release the important financial data we deemed important to investment.
Q: After the government failed to release the information, what was the result? What happened to bond prices?KATE: However, by 2020, about four years after their first release, the country began paying off its debt. And because the issuer was unable to resolve or gain a complete debt restructuring with the investors, those investors are now left with a reasonable loss, which is more than 30 per cent. Therefore, this ESG consideration not only has an impact on the natural, social and administrative perspective, but also has a significant impact on customer outcomes.