ESG engagement case study: assessing Huawei risk

8 min read 12 Oct 20

The M&G Global High Yield ESG Bond Fund combines M&G’s long-running expertise in credit analysis with a rigorous assessment of environmental, social and governance (ESG) factors. Through a series of case studies, we take a closer look at how ESG factors are incorporated into our credit research process to help achieve a more comprehensive understanding of the companies in which we invest.

In this piece we take a look at the growing pressure faced by Chinese telecommunications equipment supplier Huawei and the impact this could have across the wider telecom sector.

Key points:

  • With increasing concerns around the viability of Huawei as a supplier of telecom equipment, M&G senior credit analyst Simon Duff has launched an in-depth review across the telecom sector.
  • Through an active engagement process, we have sought to establish the extent of each company’s exposure to Huawei and the potential costs associated with replacing existing equipment.
  • By combining detailed credit analysis with active company engagement, we have been able to gain a clearer picture of the Huawei-related risks for the sector and some of our portfolio holdings.

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By Phillip Hague

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

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