Sustainability rating of unit-linked insurance companies
The analysis of the Swedish unit-linked companies’ sustainability work was first launched in 2015. We now cover 14 unit-linked insurance companies.
Why should you choose sustainable fund insurance, and perhaps above all, sustainable funds? It is a way to use your pension savings and power as a consumer to drive the development towards a more sustainable asset management, which means that the fund managers take environmental, social and corporate governance factors into account. The analysis should be seen as a complement to Söderberg & Partners’ financial analysis of unit-linked insurance companies.
The unit insurance companies receive a sustainability rating according to the Söderberg & Partners traffic light model, where green ratings are given to the unit-linked insurance companies that are best at working with sustainability, and red grades are given to the unit-linked insurance companies that are not considered to have an equally developed sustainability work relative to the other companies. The grade is based on four perspectives that have been identified to be the most important and clearly differentiating the different companies' sustainability work: “Availability of sustainable funds”, “Sustainability in manager selection”, “Engagement” and “Communication and transparency”.
Theme: Sustainability ratings
Sustainability rating and labels of funds are becoming more common. To make it easier for savers to choose a sustainable alternative, the fund insurance companies display various symbols in the fund list. But what do the different labels really stand for?
Morningstar's sustainability globes measure how well the companies that a fund has invested in handle ESG issues, compared to other funds in the same category. This is based on data on the individual stock exchange companies from Sustainalytics. The sustainability value measures the level of sustainability in the individual holdings, i.e. provides a snapshot of how sustainable the companies in the fund are. However, the marking does not take into account the fund company’s engagement work as owner of the companies.
UN Principles for Responsible Investment (PRI) is an initiative that more and more asset managers, asset owners and other players in the financial industry have signed. PRI is based on six principles for responsible investment, which means that you actively commit to working with sustainability issues in the asset management. However, there are no stated requirements, other than that signatories are expected to report their work. The fact that a fund manager has signed PRI does not automatically mean that the funds are more sustainable than the market.
Söderberg & Partners’ sustainability rating is based on the traffic-light system. It is simple and helps customers find the best and most sustainable products. A green rating is given to products that take sustainability aspects into account in their product construction, and where the managers engage actively and proactively with companies to move them towards more sustainable business practice.