2015

Sustainability rating of funds

The sustainability analysis of funds was first launched in 2015. The analysis is unique as it highlights what the different fund managers are doing well and not so well.

Background

How do you want your savings to be managed? Choice of fund manager affects the yield. If the fund manager also works with sustainability issues in a good way then the choice can also affect the environment, society and working conditions. And there is reason to believe that the latter is linked to the former.

As the interest in sustainability increases, the number of sustainable savings products marketed as sustainable is increasing. The choice of fund can have a major impact on both the environment and society as a whole, and it is therefore important to understand whether the fund managers take sustainability into account in their investment decisions. The analysis should be seen as a complement to Söderberg & Partners’ financial analysis of funds.

Method

We have utilized publicly available material and distributed a questionnaire to fund managers about their work with sustainability. The funds receive ratings in sustainability according to Söderberg & Partners’ traffic light model, where green ratings are given to funds that are best at taking sustainability into account, and red ratings are given to funds that have a less developed work with sustainability. The rating is based on two parameters: positive selection and responsible ownership. The result in the two perspectives are then weighted together to a final rating.

Findings 2019: Still a niche product

Several fund managers have begun to integrate sustainability aspects in large parts of their fund offerings, but there is still work left before it permeates the entire fund offering and all products. Having a sustainable fund management also means that a solid engagement work is carried out. It is important to engage in dialogue and encourage companies to be transparent with their sustainability challenges and work to improve their sustainability work. Among the funds, there is still a general lack of transparency, formalized processes and monitoring. This is an area where more can become even better, because there is reason to believe that sustainable companies will have greater chances, in the long run, of meeting the challenges of the future. To the right are the asset management companies with highest average score in the fund categories Active equity, Passive equity and Fixed income. 

Source: Sustainable Funds 2019.