Challenges in fixed income ESG analysis. The challenges of managing and integrating ESG factors in fixed income are similar to those seen in other asset classes. These include the lack of transparency in reporting of ESG metrics, the inconsistent and changing methodologies, the use of data that has only been estimated rather than measured with precision, and lack of comparability through time and between providers and companies. However, there are also ESG-related challenges that are specific to fixed income securities. The first one of these is the time horizon. Fixed income instruments typically have maturity of anything between three months and 50 years, but most of the time, analysts need to have an opinion on instruments such as corporate bonds with maturity of just a few years. ESG factors, however, tend to be long-term in terms of how long it takes for these ESG risks to have an impact on the issuer. For example, climate change risks can take years to have an impact on the issuer. Social risks, for example, a risk of reputational damage due to poor supply chain oversight, may also take a long time to crystallize. It may be many years before any reputational damage materializes. The second issue is the lack of a proxy vote. Because fixed income investors cannot vote at the issuer's annual general meeting, they cannot easily influence or make their views known to the management team. Those views may relate to how well investors believe the management teams are managing environmental risks that the business faces. In addition, direct engagement with the management may be more difficult. Lastly, sovereign debt investors may pay attention to a different set of factors than equity or credit investors.