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Baird Aggregate Bond Inv BAGSX Sustainability

| Analyst rating as of | See Baird Investment Hub

Sustainability Analysis

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Sustainable Summary

Sustainability Summary is not assigned to this investment.

Morningstar generates quantitatively driven content that covers the Environmental, Social, and Governance (ESG) characteristics for managed investments that have both a Morningstar Sustainability Rating and a Carbon Risk Score, called the Sustainability Strategy Summary. This share class’ Sustainability Summary content was not generated because of insufficient data. To generate individualized content, the Sustainability Summary requires sufficient data to create its framework of “mental models” designed to mimic content written by analysts. The Sustainability Strategy Summary uses an algorithm designed to predict the ESG analysis that analysts would produce on the investment product if they covered it.

ESG Commitment Level Asset Manager

 | Low

Its rudimentary efforts in the field support a Morningstar ESG Commitment Level of Low.

ESG is, at best, a peripheral consideration for the firm. Baird does not have a distinct ESG research or engagement team and publishes next to no materials on the subject. With the exception of funds investing along Catholic principles, the firm does not offer any ESG-intentional strategies. ESG considerations, backed by data streams from a handful of providers including ISS and Bloomberg, do play a part in how the research team evaluate issuers, but only if ESG material issues have a direct impact upon the cash flows or creditworthiness of the issuer. There are no ESG-specific targets against which the portfolio managers run their portfolios, nor do distinct ESG metrics factor into their (or the broader analyst team’s) performance reviews or compensation. Furthermore, the work of maintaining these ESG resources falls upon the shoulders of analysts and portfolio managers who already have traditional investing responsibilities to attend to, making ESG integration a secondary objective.

Partially owing to approximately 95% of the firm’s AUM being invested in fixed-income assets, Baird’s proxy-voting and engagement efforts are very limited. While the firm has a proxy-voting policy, the fixed-income team rarely invests in issues with voting rights and does not have an ESG-linked engagement policy, limiting the team’s contact with issuers to traditional price discovery and due-diligence matters. The equity team does appear to have an active ESG-linked voting record, but its small footprint limits its impact on the firm’s overall efforts. Finally, Baird does not formally link itself to any widespread investor advocacy groups, nor has it signed on to the UN Principles of Responsible Investing.