ESG Clarity adapts index to bring in additional sustainability elements, altering top 25 funds
In the three years we have been running the Responsible Ratings index (RRI) a lot has changed. What constitutes an ESG fund, as well as investor preferences for sustainability criteria, has adapted and most investors are now looking for more than an ESG rating. With that in mind, we have updated our criteria to bring in additional sustainability elements.
First, using MSCI data, we are looking at whether funds are aligned with global temperature goals. Based on both reported and estimated Scope 1 and 2 carbon emissions, MSCI measures the carbon responsibility, efficiency and exposure attributed to an index or fund, and calculates alignment or misalignment, which we have incorporated into our RRI five-point scoring.
We are also looking at fund exposure to ESG risks, such as climate risk; UN violations of the Global Compact; and controversies, as assessed by MSCI’s ESG Controversies methodology, which may be related to the environment, customers, human rights, labour rights or governance.
Finally we have looked at board construction, both in terms of independence (the percentage of independent members) and gender diversity.
Click here for an analysis of the top funds in this ESG Clarity’s October 2023 digital magazine.
| Name | Position | RRI | Size (£bn) | Global category | Temperature | Climate transition risk and opportunities exposure | Board independence best practice alignment | Board diversity best practice alignment | UNGC violations exposure | Red flag controversies exposure |
|---|---|---|---|---|---|---|---|---|---|---|
| Brown Advisory US Sust Gr | ▲ 14 | 5.00 | 3.6 | US Equity Large Cap Growth | Aligned | Low | 81% | 34% | 0 | 0 |
| BNY Mellon Mlt-Asst Balanced | ▲ 14 | 5.00 | 2.8 | Aggressive Allocation | Misaligned | Moderate | 81% | 39% | 1 (0.7%) | 1(0.7%) |
| BNY Mellon Mlt-Asst Growth | ▲ 13 | 5.00 | 2.1 | Aggressive Allocation | Misaligned | Moderate | 80% | 37% | 2 (1.3%) | 2 (1.3) |
| BlackRock Continental Euro | ▲ 19 | 5.00 | 1.2 | Europe Equity Large Cap | Misaligned | Very Low | 79% | 41% | 0 | 0 |
| Comgest Growth Europe | NEW | 5.00 | 4.5 | Europe Equity Large Cap | Misaligned | Moderate | 76% | 41% | 0 | 0 |
| TB Evenlode Income | NEW | 5.00 | 3.3 | UK Equity Large Cap | Aligned | Low | 79% | 43% | 0 | 0 |
| Jupiter Asian Income | NEW | 5.00 | 1.3 | Asia ex-Japan Equity | Misaligned | Moderate | 77% | 27% | 1 (4.8%) | 1 (4.8%) |
| Wellington Global Stewards | NEW | 5.00 | 1.2 | Global Equity Large Cap | Aligned | Low | 83% | 38% | 0 | 0 |
| MS INVF Global Brands | ▼ 6 | 5.00 | 17.7 | Global Equity Large Cap | Aligned | Low | 83% | 40% | 0 | 0 |
| Pictet – Global Envir Opps | NEW | 5.00 | 6.5 | Global Equity Large Cap | Misaligned | Moderate | 80% | 37% | 0 | 0 |
| Schroder ISF Glbl Sust Gr | NEW | 5.00 | 4.1 | Global Equity Large Cap | Aligned | Low | 80% | 35% | 0 | 0 |
| Nordea 1 – Alpha 10 MA | ▼ 6 | 5.00 | 3.8 | Multialternative | NA | Low | 81% | 37% | 0 | 0 |
| Nordea 1 – Alpha 15 MA | ▼ 6 | 5.00 | 3.5 | Multialternative | NA | Low | 80% | 37% | 0 | 0 |
| CCLA COIF Charities Investment | ▼ 4 | 5.00 | 3.4 | Aggressive Allocation | Misaligned | Moderate | 81% | 32% | 0 | 0 |
| RobecoSAM Smart Energy Eqs | NEW | 5.00 | 3.4 | Energy Sector Equity | Misaligned | Moderate | 81% | 32% | 0 | 0 |
| Robeco Sust Global Stars Eqs | ▼ 4 | 5.00 | 2.8 | Global Equity Large Cap | Misaligned | Low | 82% | 36% | 0 | 0 |
| MS INVF Global Quality | NEW | 5.00 | 1.8 | Global Equity Large Cap | Aligned | Low | 82% | 38% | 0 | 0 |
| Morgan Stanley UK Global Brands | ▲ 3 | 5.00 | 1.1 | Global Equity Large Cap | Aligned | Low | 83% | 40% | 0 | 0 |
| KBI Global Energy Transition | NEW | 5.00 | 1.1 | Energy Sector Equity | Misaligned | High | 82% | 34% | 0 | 0 |
| MFS Meridian Prudent Wealth | NEW | 5.00 | 2.5 | Moderate Allocation | Aligned | Low | 73% | 32% | 0 | 0 |
| Fidelity Asia Pacific Opps | NEW | 5.00 | 1.8 | Asia ex-Japan Equity | Misaligned | Moderate | 71% | 28% | 0 | 0 |
| Fidelity Asia Pacific Opps | NEW | 5.00 | 1.7 | Asia ex-Japan Equity | Misaligned | Moderate | 71% | 28% | 0 | 0 |
| SUTL Cazenove Charity Sust MA | NEW | 5.00 | 1.5 | Aggressive Allocation | Misaligned | Moderate | 68% | 20% | 0 | 0 |
| Fidelity Sustainable EM Eq | NEW | 5.00 | 1.3 | Global Emerging Markets Equity | Misaligned | Moderate | 68% | 20% | 0 | 0 |
| Schroder ISF Hong Kong Eq | ▼ 6 | 5.00 | 1.2 | Greater China Equity | Misaligned | Moderate | 59% | 22% | 2 (0.1%) | 2 (0.1%) |