Name: Sustainability Themed funds

Investment funds which focus on sustainability related issues when deciding where to invest

Brief description of Style

Sustainability Themed funds focus on sustainability related issues and opportunities as part of their investment strategy, often alongside ethical criteria. Their focus is often around longer term societal and environmental trends.

SRI approach applied

Fund managers select companies that fit within their published investment themes and typically favour well run, forward looking, longer term focused, sustainably managed businesses.

Fund managers in this Style generally select companies with sound environmental, social and governance strategies often favouring those that are helping to enable the shift towards sustainable business practices and lifestyles.

SRI Issues

Fund managers look for companies that have a positive impact on society as well as the environment.

Relevant issues include sound management of sustainability related themes such as the responsible use of resources, good employee, good stakeholder relations and addressing long term environmental challenges. Funds may also benefit from responsible ownership policies.

Variation across Style segment

Fund aims, approaches, investment strategies and resources vary. Different fund managers have different views on what constitutes progress towards ‘sustainability’. Some fund managers focus on ‘best in sector’ companies across most industries whereas other are more focused on specific themes.

Some include values based ethical exclusions (such as avoidance of armaments and tobacco companies) others do not.

Some of these funds strategies include Responsible Ownership strategies.

Impact on investment strategy

Fund managers invest in companies that are expected to succeed as a result of the way they approach environmental and social challenges.  They will aim to hold companies that are expected to benefit from the raising of standards across a range of environmental, social and governance (ESG) related issues – without necessarily avoiding a significant number of business sectors.  Many funds of this kind have the option to invest across most sectors – and are therefore often able to be flexible as market conditions change.

Who is this Style most likely to appeal to?

Ideal for investors who are looking to benefit from, support or encourage companies with more sustainable policies, practices and products.

Associated Styles

Some of these funds have much in common with Balanced Ethical and Environmental Themed funds.

Associated jargon

Sustainability, environmental – fund names often indicate taking a responsible view on the future.

Providers

Fund providers include established and newer market entrants.

 

 What is Sustainability?

‘…meeting the needs of the present without compromising the ability of future generations to meet their own needs.’

Source: The Brundtland Report 1987