All abrdn funds have now been re-assessed through our impact methodology for 2022. Read our summary on how they performed.
We re-assessed the ASI Multi-Asset Climate Solutions fund earlier in the year to let you know of its Gold medal rating and we have now also re-assessed all other abrdn funds on The Big Exchange.
Four further funds from asset manager abrdn have gone through our annual reassessment process to ensure they are still delivering against the Big Exchange impact methodology. These are the ASI Global Equity Impact Fund, ASI UK Ethical Equity Fund, ASI Europe ex-UK Ethical Equity Fund and ASI Ethical Corporate Bond Fund and we are pleased to report they have retained the medals previously awarded.
abrdn (formerly known as Aberdeen Standard Investments) is a global investment firm which takes responsible investing very seriously, reflecting their belief that careful ESG (Environmental, Social and Governance) analysis can improve outcomes at all levels. Active engagement and voting are central to their goal of making a difference for the wider world.
The funds we have assessed incorporate rigorous ethical or sustainability criteria. Ethical investing is long established at abrdn, and the fund managers are highly experienced in dealing with any controversies that may arise. Investors in the ethical funds are asked what issues matter to them most, as concerns evolve over time and the team takes any notable changes into account.
The ethical funds do not have specific impact objectives so receive bronze or silver medals due to a lower proportion of the portfolios’ core products and services being invested in positive solutions as per the SDGs (Sustainable Development Goals). ASI Global Equity Impact Fund, as its name suggests, aims for a measurable positive impact and, having demonstrated to us that it is clearly delivering on this, we consider it warrants a gold medal.
This fund aims to generate long-term growth from companies making a positive environmental and/or social impact by tackling the challenges of climate change, inequality, and unsustainable consumption and production.
The fund takes a thematic approach, with a focus on large companies offering solutions from concept through to delivery. Opportunities are typically identified in sustainable energy, health and social care, education and employment, agriculture, housing, and financial inclusion.
Working closely with the responsible investing team, ESG analysis forms the basis for engagement and companies are supported in improving their impact. The fund scores 2 out of 3 for positive influence. Transparency is very good; impact is measured and reported with reference to the UN Sustainable Development Goals (SDGs), in an annual report and quarterly impact updates. Hence it scores 3 out of 3 for impact evidence.
The fund offers geographical diversification with investments in the US (41%), Europe (28%), Emerging Markets (11%) and the UK (12%). At a sector level 24% of the portfolio is held in Industrials, 17% in Healthcare, and 15% in Financials.1
The funds maps most closely to SDG 3 (Good Health and Well-Being), SDG 9 (Industry, Innovation, and Infrastructure) and SDG 12 (Responsible Consumption & Production). These represent 16%, 14% and 15% of the portfolio respectively.2 We found clear evidence that the fund goes the extra mile to make a meaningful difference, with 83% of the portfolio in positive solutions, and consider its gold medal to be well-deserved.
This is where we take a company that the fund invests in and tell you more about what it does to show you how your money can count for more.
One of the fund’s biggest holdings is Prologis which acquires, develops, and maintains warehouses. Its expertise is in offering high-quality, environmentally friendly facilities, with certifiably sustainable design on all new buildings, and helping to upgrade older ones. Their buildings feature: recycled and locally sourced construction materials; high-reflectance roofing materials which stay cooler in the sun; onsite recycling; bicycle and carpool parking; energy-efficient lighting systems and use of solar, storage and wind power to lower energy costs. By putting customers, communities, and the planet at the heart of everything they do, their goal is to build a better future for everyone.
This fund’s objective is to grow your money over the long term by investing mostly in UK companies that meet its strict ethical criteria. The manager also seeks companies that have a positive effect on the environment or the quality of human life. The fund aims to have at least 80% of the portfolio in investments with 'preferred status' according to ASI's ESG scoring.
On the exclusion list are animal testing; genetic engineering; intensive farming; gambling; pornography; tobacco and weapons. On the other hand, positive characteristics include sustainable products and services, equal opportunities policies, strong community involvement and good business practices.
The fund provides exposure to different industry sectors across the UK stock market with 23% of the portfolio in Industrials, 22% in Consumer Discretionary, 18% in Financials and 13% in Technology.1 There is a bias towards mid-cap and smaller companies as this is where the manager finds the best opportunities. Companies at an earlier stage of development may offer good growth prospects but can be more volatile (meaning their share prices move up and down a lot) as they tend to be less liquid (making them more difficult to buy and sell).
ESG analysis is rigorous, with positive and negative developments monitored, and there is active engagement and advocacy so the fund scores 2 out of 3 for positive influence. The transparency score has improved to 2 out of 3 as abrdn now reports on ESG issues at fund level. That said there is no impact report (although this would not be expected from an ethical fund) which limits overall transparency.
The fund maps most closely to SDG 3 (Good Health and Well-Being), SDG 9 (Industry, Innovation, and Infrastructure) and SDG 11 (Sustainable Cities and Communities). These represent 4%, 4% and 3% of the portfolio respectively.2
Whilst this fund is making a difference by avoiding harmful activities it is not specifically focused on creating positive impact to the same extent as other funds on the Big Exchange. Our analysis found only 24% of the fund is invested in stocks which offer positive solutions through their products and services.2 As such, it receives a bronze medal.
This is where we take a company that the fund invests in and tell you more about what it does to show you how your money can count for more.
Genuit (this company changed its name, from Polypipe, in 2021) provides solutions to address the environmental challenges facing the built environment (simply the places where we live and work) and its communities. The firm’s goal to be a leading supplier to sustainable construction projects and it is committed to reducing the carbon footprint of its operations and products by reducing emissions without resorting to carbon offsetting. It aims to set the industry standards for the elimination of waste whilst increasing the use of recycled materials and becoming a zero-to-landfill business. Innovative products include holistic water management solutions, low-carbon heating, cooling systems which facilitate the energy transition, and ventilation management systems that ensure the air we breathe is clean and safe.
The fund’s objective is to grow your money over the long term by investing in companies, mainly listed in Europe, which meet the standards set out in its ethical investment policy.
If you invest in this fund, you will gain exposure to stock markets in Germany (16% of the portfolio), France (16%), Netherlands (14%) and Italy (11%). It does not usually include UK companies in the portfolio. Across industry sectors, the biggest weightings are Industrials (27%), Financials (18%) and Technology (17%). 1
ESG factors are incorporated into investment decisions, and outcomes scored and monitored with attention to potential controversies. There is active engagement and advocacy so the fund scores 2 out of 3 for positive influence. The transparency score has improved to 2 out of 3 as abrdn now reports on ESG issues at fund level. That said there is no impact report (although this would not be expected from an ethical fund) which limits overall transparency.
The fund maps most closely to SDG 3 (Good Health and Well-Being), SDG 9 (Industry, Innovation, and Infrastructure) and SDG 12 (Responsible Consumption and Production). These represent 4%, 4% and 3% of the portfolio respectively.2
Although labelled an ethical fund, which means avoiding harmful activities, it has a clear focus on companies making a positive impact. Almost half the portfolio is invested in companies that provide solutions to the UN Sustainable Development Goals (SDGs) through their core products and services so overall it merits a silver medal.
This is where we take a company that the fund invests in and tell you more about what it does to show you how your money can count for more.
Antin is a leading private equity firm focused on infrastructure investments in the energy and environment, telecommunications, sustainable transport, and social infrastructure sectors. The firm invests for the long-term and is committed to ESG analysis to help reduce risks and generate opportunities. Their Responsible Investing approach includes being active owners and seeking relevant disclosure on ESG issues by companies in which they invest, promoting the UN PRI (Principles for Responsible Investment) within their industry, working with other investors to encourage improvements, and reporting on the progress of investee companies towards implementation of the PRI framework.
The fund’s objective is to generate income, and some growth over the long term, by investing in bonds (a loan arrangement) which meet the managers’ ethical criteria. These are typically high-quality bonds issued by companies, although it may also hold some government bonds.
The fund is most exposed to Financials which account for 39% of industry exposure, reflecting the fact that this sector is a significant part of the bond universe. Utilities represent 17% of the portfolio and Real Estate 15%.1
This fund is mostly focused on negative exclusions, avoiding industries such as weapons and gambling. That said, ESG factors are incorporated into investment decisions, and outcomes scored and monitored with attention paid to potential controversies. Overall, 80% of the portfolio must be rated 'preferred' or higher under abrdn’s internal framework.
The ESG team supports engagement with investee companies although usually the opportunities for bond investors to exert influence are limited compared to equity shareholders. Unlike shares in a company, bonds do not bestow ownership (and voting rights). Hence the fund scores 2 out of 3 for positive influence. The transparency score has improved to 2 out of 3 as abrdn now reports on ESG issues at fund level. There is no impact report (not surprising for an ethical fund) which limits overall transparency.
The fund maps most closely to SDG 1 (No Poverty), SDG 6 (Clean Water & Sanitation) and SDG 11 (Sustainable Cities and Communities). These represent 11%, 7% and 9% of the portfolio respectively.
Square Mile’s independent analysis, conducted for The Big Exchange, shows around 38% of the portfolio provides positive solutions to the SDGs through core products and services. Overall, it is evident this fund is making a difference, so it receives a bronze medal. 2
This is where we take a company that the fund invests in and tell you more about what it does to show you how your money can count for more.
The EIB is a non-profit organisation whose shareholders are the EU member states. It makes grants and loans on favourable terms to projects that further EU policy objectives, particularly in relation to infrastructure and climate action. EIB loans benefit less-developed European countries, environmental improvement and sustainability, energy security, and technology and scientific innovation. In 2019, the board approved a plan to invest €1tn into projects related to climate action or environmental sustainability between 2021 and 2030. It expects that 50% of its financing will relate to climate by 2025, making it one of the largest providers of climate finance.3 The bank has also committed to allocate up to €200bn to support the coronavirus recovery.
1 Fund factsheets @ 28 February 2022
2 Big Exchange Impact Assessment March 2022
3Source = https://www.investopedia.com/terms/e/europeaninvestmentbank.asp
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