Schroder International Selection Fund (ISF) QEP Global ESG Fund
SRI Style:
ESG Plus
SDR Labelling:
Not eligible to use label
Product:
SICAV/Offshore
Fund Region:
Global
Fund Asset Type:
Equity
Launch Date:
24/09/2015
Last Amended:
Apr 2024
Dialshifter (
):
Fund Size:
£397.77m
(as at: 31/12/2024)
Total Screened Themed SRI Assets:
£58000.00m
(as at: 31/12/0002)
Total Responsible Ownership Assets:
£737573.00m
(as at: 31/12/2022)
Total Assets Under Management:
£737573.00m
(as at: 31/12/2022)
ISIN:
LU1775314054, LU2238470137, LU1274618997, LU1436220617, LU1528092551, LU1274619375
Contact Us:
Objectives:
The fund aims to provide capital growth and income in excess of the MSCI AC World (Net TR) Index after fees have been deducted over a three to five year period by investing in equities of companies worldwide which meet the investment manager's sustainability criteria.
Sustainable, Responsible
&/or ESG Overview:
The Schroder QEP Global ESG strategy is based on the proven QEP investment approach, by which we have been managing assets since 2000. It is index-unconstrained and designed to deliver higher long-run returns than the market. Analysing a universe of over 10,000 ESG-rated companies, the team constructs a highly diversified portfolio typically containing over 200 stocks.
The investment process incorporates ESG considerations in several different ways: exclusions, integration, research and engagement. In terms of integration into stock selection, based on our research we allocate more capital to stocks with good ESG characteristics and penalise those which are poor. In addition to the ESG aspects of the strategy, stock selection is grounded in the analysis of company fundamentals indicating Value and Quality, and portfolios will typically exhibit a style bias towards both of these factors.
Primary fund last amended:
Apr 2024
Information directly from fund manager.
Fund Filters
Sustainability - General
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Find funds that specifically aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Find funds that publicly report their performance against specifically named sustainability objectives (in addition to reporting their financial performance)
Environmental - General
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
Funds that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change. Funds vary - some funds may be 'underweight' in this area which means they may have some investment in highly carbon intensive areas. Funds of this kind may choose companies they consider to be 'best in sector' and encourage ever higher standards. Strategies vary. See fund information for further details.
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail.
Nature & Biodiversity
Find funds that have a written biodiversity policy or theme aimed at encouraging and improving environmental protection and safeguarding the natural world (sometimes referred to as the preservation or enhancement of 'natural capital'). See eg https://www.un.org/en/climatechange/science/climate-issues/biodiversity
Find funds that have policies in place designed to ensure they do not invest in companies that are significantly involved in deforestation. This typically relates to palm oil plantations where biodiversity loss is a major concern (as well as other issues). Strategies vary. See fund information for further detail.
Fund has a responsible palm oil policy which is likely to focus on the producers of palm oil and deforestation issues with a view to informing investment decisions (and / or engagement) to support and encourage high standards.
Fund has a policy which sets out their expectations for how investee assets should manage water
Climate Change & Energy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Funds that avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary. See fund information for further information.
Funds that avoid companies that are involved in extracting oil from the Arctic regions. See fund literature for further details.
Find funds where investment in clean / renewable energy companies an other assets is central to their investment selection strategy. The proportion of the fund that is directly or indirectly invested in renewable energy varies between funds and over time. See fund information for further details.
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Fund funds that have an energy efficiency theme - typically meaning that a fund manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Funds that hold companies in the clean energy and renewable energy sectors (at the time research was supplied). Fund strategies vary, in particular the proportion of investment in these areas may vary significantly. Check fund literature for details.
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail.
The fund manager excludes companies with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/
Social / Employment
Find funds that have policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). Funds with social policies typically avoid companies with low standards or work to encourage higher standards. See fund information for detail.
Find funds that have a labour standards policy - which can be expected to mean that the fund will invest in / favour companies that have higher standards in this area - although fund strategies can vary significantly (as with all policy areas). See eg https://www.ilo.org/international-labour-standards
Find funds that invest in line with positive strategies that relate to 'people' issues - such as having strong human rights, labour standards and equal opportunities practices. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices. Read fund literature for further information.
Find funds with policies or themes that set out their approach to health and wellbeing issues. Funds of this kind typically aim to invest in companies with high standards - or encourage high standards. Themed funds are likely to have more of an emphasis on this area. Strategies vary. See fund information for further detail.
Find individual funds that have a written diversity policy – where the fund manager will aim to select companies with a carefully considered, sound approach to diversity. This should ideally cover a range of issues including gender, ethnicity, disability, beliefs, sexual orientation, etc.
Ethical Values Led Exclusions
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information.
Human Rights
Find funds that have policies or a theme that relates to the responsible management of supply chains. These may relate to employment issues, notably people employed by their suppliers, as well as the sourcing of materials and products. See fund literature for further information.
Banking & Financials
Fund excludes financial services companies with widely criticised, aggressive lending practices where interest rates are typically very high, includes ‘doorstep lending’)
Governance & Management
Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices. Strategies vary. See fund literature for further information.
Find funds that aim to avoid investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards. See fund literature for further information.
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity
Fund Governance
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature.
Asset Size
Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Find a fund that invests in a combination of small, medium and larger (potentially multinational)companies.
Impact Methodologies
Funds that aim to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Funds that aim to deliver positive impacts and measure those impacts may be referred to as 'impact funds' - although impact measurement is not restricted to impact funds. Strategies vary. See fund information.
Find funds that specifically set out to invest in companies that are regarded as 'disrupting' existing business practices - typically through the development of innovative (sustainability aware) products and/or practices.
Fund aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets
How The Fund Works
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
Find funds that invest more heavily in those that have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to a fund's strategy you should expect it to invest in most sectors. Strategies vary.
Find funds that make stock selection (and ongoing fund management) decisions based on ESG data or company ratings (normally supplied by third parties) rather than focusing on what individual companies do, how they operate or their plans for the future
Find funds that have 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Find funds that consider both the 'positive' and 'negative' aspects of company behaviour and make balanced, considered decisions as part of their investment approach. May apply to a range of different issues and policy areas.
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
Intended Clients & Product Options
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Finds funds designed to meet the needs of individual investors with an interest in ‘Impact investment funds’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Only applicable for DFM’s & portfolio providers. Finds those that offer an SRI / ESG portfolio option
Only applicable for DFM’s & portfolio providers. Find service providers who offer multiple SRI / ESG portfolio options
Labels & Accreditations
Finds funds classified under Article 8 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 8 of the SFDR is a set of requirements that apply to financial products that 'promote' environmental or social characteristics with high governance also. These rules do not currently apply to UK funds so many managers may leave this field blank.
Engagement Approach
Fund manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Asset manager has a stewardship /responsible ownership strategy that involves working with fossil fuel companies on climate change related issues. See fund manager website for details.
Asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
The asset manager has a responsible ownership / stewardship strategy that focuses on biodiversity and nature issues relating to the assets they invest the aim of which will be to reduce harm and or deliver improvement. Strategies vary. https://tnfd.global
Asset manager has responsible ownership / stewardship strategy in place that aims to improve labour standards for the benefit of employees in investee companies (and potentially their suppliers)
Fund managers have stewardship strategies in place that focus on improving governance standards across investee assets
Has a stewardship / responsible ownership strategy that encourages responsible supply chain - ie the managers will discuss environmental, social and governance issues with investee companies with the aim of raising standards
Transparency
Find fund management companies that have supplied Dialshifter information. See Dialshifter tab within record for more information.
Sustainable, Responsible &/or ESG Policy:
Whilst the Schroder ISF QEP Global ESG fund does not have an explicit sustainable investment objective, it promotes environmental or social characteristics.
The fund’s characteristics policy indicates that it must maintain a higher overall sustainability score than the MSCI AC World (Net TR) index, based on the Investment Manager’s rating system. This benchmark (which is a broad market index) does not take into account the environmental and social characteristics promoted by the Fund.
The Fund also promises to invests at least 40% of its assets in sustainable investments, which are investments that the Investment Manager expects to contribute towards the advancement of one or more environmental and/or social objective(s).
QEP’s approach to not causing significant harm to any environmental or social sustainable investment objective includes the following: Firm-wide exclusions apply to Schroders funds. These relate to international conventions on cluster munitions, anti-personnel mines, and chemical and biological weapons. A detailed list of all companies that are excluded is available at https://www.schroders.com/en/sustainability/active-ownership/group-exclusions/.
Schroders became a signatory to the UN Global Compact (UNGC) principles on 6 January 2020. The Fund excludes companies in violation of the UNGC principles from the portion of the portfolio in sustainable investments, as Schroders considers violators cause significant harm to one or more environmental or social sustainable investment objectives. The areas determining whether an issuer is an UNGC violator include issues that are covered by the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, such as human rights, bribery and corruption, labour rights, child labour, discrimination, health and safety, and collective bargaining. The list of UNGC violators is provided by a third party and compliance with the list is monitored via our automated compliance controls. Exceptions may apply, if there is evidence to demonstrate that the company has addressed the violation and is not causing significant harm as described above.
The Fund also excludes companies that derive revenues above certain thresholds from activities related to tobacco and thermal coal, especially tobacco production, tobacco value chain (suppliers, distributors, retailers, licensors), thermal coal mining and coal fired power generation. Please see the fund’s sustainability disclosures for specific thresholds for mentioned activities.
The Fund may also apply certain other exclusions.
Further information on all of the Fund’s exclusions is to be found further below in the “Monitoring of environmental or social characteristics” section.
Wherever the Investment Manager deems possible, in the context of an incomplete and developing data landscape, the Investment Manager sets levels or principles for what would be deemed to cause significant harm by applying appropriate values in relation to the principal adverse impacts applicable to sustainable products. Investee companies deemed to be in breach of these levels would not be eligible to be considered as a sustainable investment. Our framework is subject to ongoing review, particularly as the availability, and quality, of the data evolves.
We use a list of UNGC violators as provided by a third party. Issuers on that list cannot be categorised as sustainable investments. The areas considered when determining whether an issuer is an UNGC violator include those covered by the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, such as human rights, bribery and corruption, labour rights, child labour, discrimination, health and safety, and collective bargaining.
Process:
Within our approach to both stock selection and portfolio construction, we fully integrate Environmental, Social and Governance (ESG) considerations across the full suite of QEP Investment Strategies alongside our focus on traditional fundamental measures. The breadth of opportunities available in global equities allows for the full integration of ESG considerations without having to sacrifice potential returns. We would argue that incorporating ESG enhances performance, providing it is integrated in an investment led manner, and that ESG considerations are likely to become increasingly additive in the future.
The QEP investment process integrates ESG considerations in the following ways across all QEP investment strategies:
- QEP Governance has for many years been a key component of our assessment of business quality alongside profitability, stability and financial strength. Our assessment of the strength of a company’s corporate governance therefore has a direct impact on our level of conviction.
- QEP ESG Rank is central in building our assessment of a company’s sustainability profile, and the rank and its subcomponents are utilised as a stock conviction/risk adjustment scalar which impacts stock weighting across all QEP funds.
- QEP Country Risk Monitor includes Political and ESG considerations to adjust our portfolios’ exposure to countries with elevated risks. It is used as an input within our QEP ESG Rank as well as a stock level risk adjustment. It also contributes to our decision making process for risk managing active currency exposures.
- Thematic Research. The team carries out research around ESG themes and, where appropriate, we incorporate into the stock selection process penalties or rewards for stocks which are part of a negative or positive theme respectively. These targeted sustainable themes also serve to help highlight those stocks we have identified as mapping to the UN’s Sustainable Development Goals (SDGs).
- Active Stewardship Programme through collaboration with Schroders’ Sustainable Investment Team. We have a robust approach to encouraging positive change through active engagement and voting seeking to integrate the insights gathered into our investment process.
- Exclusion policies. Alongside the firm wide ESG exclusions, we apply QEP desk wide exclusions such as predatory lending and significant exposure to thermal coal, to all QEP dedicated ESG strategies. Exclusions in addition to these are client and market led and so will vary across the QEP investment strategies, ranging from our dedicated ESG strategies where we apply our broadest exclusion policy, to segregated accounts where exclusion policies are tailored to suit client specific requirements.
The QEP Investment Team has access to well over a hundred data points related to ESG issues covering a wide range of areas. External sources include MSCI, Thomson Reuters Refinitiv, Sustainalytics, Bloomberg, BoardEx, World Bank, UN, & OECD. The raw data items are subject to rigorous daily checking before use in our process. Additionally, Schroders subscribe to Institutional Shareholder Services and the Investment Association’s Institutional Voting Information Service for proxy voting research carried out by in-house corporate governance analysts.
All research which shapes the investment process and therefore drives investment decisions is internal and proprietary to QEP, but we use third-party data to support our assessment of ESG issues via our proprietary QEP ESG rank which is the primary method we employ for integrating sustainability considerations across our strategies. This rank analyses all stocks in our investable universe to scalably provide an assessment of each stock's sustainability profile. Our approach avoids the pitfalls of mechanistic or passive based approaches by carefully selecting the most objective inputs to capture specific risks that are material to different industries, reflecting both absolute and relative considerations. We draw upon the resources of Schroders’ Sustainable Investment team and a variety of data vendors to blend both traditional and ESG specific data sources, ultimately converting a variety of raw inputs into useable investment insights.
Dialshifter
Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by…
In December 2020, we joined 29 other global asset managers representing more than $9tn of assets in launching the Net Zero Asset Managers Initiative. As part of the initiative we have committed to:
- Work in partnership with asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero emissions by 2050 or sooner across all assets under management;
- Set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by 2050 or sooner; and
- Review our interim target at least every five years, with a goal of ratcheting up the proportion of assets covered until 100% are included, as efforts to structurally decarbonise economies play out.
SDR Labelling:
Not eligible to use label
Fund Holdings
Disclaimer
Risk Considerations - Schroder International Selection Fund (ISF) QEP Global ESG
The following risks may affect fund performance:
- Currency risk: The fund may lose value as a result of movements in foreign exchange rates.
- Derivatives risk: Derivatives may be used to manage the portfolio efficiently. A derivative may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the fund.
- IBOR risk: The transition of the financial markets away from the use of interbank offered rates (IBORs) to alternative reference rates may impact the valuation of certain holdings and disrupt liquidity in certain instruments. This may impact the investment performance of the fund.
- Liquidity risk: In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares.
- Operational risk: Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the fund.
- Performance risk: Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro economic environment, investment objectives may become more difficult to achieve.
- Stock connect risk: The fund may be investing in China "A" shares via the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect which may involve clearing and settlement, regulatory, operational and counterparty risks.
- Sustainability risk: The fund has environmental and/or social characteristics. This means it may have limited exposure to some companies, industries or sectors and may forego certain investment opportunities, or dispose of certain holdings, that do not align with its sustainability criteria chosen by the investment manager. The fund may invest in companies that do not reflect the beliefs and values of any particular investor.
- Counterparty risk: The fund may have contractual agreements with counterparties. If a counterparty is unable to fulfil their obligations, the sum that they owe to the fund may be lost in part or in whole.
- Market risk: The value of investments can go up and down and an investor may not get back the amount initially invested.
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
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Schroder International Selection Fund (ISF) QEP Global ESG Fund |
ESG Plus | Not eligible to use label | SICAV/Offshore | Global | Equity | 24/09/2015 | Apr 2024 | |
ObjectivesThe fund aims to provide capital growth and income in excess of the MSCI AC World (Net TR) Index after fees have been deducted over a three to five year period by investing in equities of companies worldwide which meet the investment manager's sustainability criteria. |
Fund Size: £397.77m (as at: 31/12/2024) Total Screened Themed SRI Assets: £58000.00m (as at: 31/12/0002) Total Responsible Ownership Assets: £737573.00m (as at: 31/12/2022) Total Assets Under Management: £737573.00m (as at: 31/12/2022) ISIN: LU1775314054, LU2238470137, LU1274618997, LU1436220617, LU1528092551, LU1274619375 Contact Us: sami.arouche@schroders.com |
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Sustainable, Responsible &/or ESG OverviewThe Schroder QEP Global ESG strategy is based on the proven QEP investment approach, by which we have been managing assets since 2000. It is index-unconstrained and designed to deliver higher long-run returns than the market. Analysing a universe of over 10,000 ESG-rated companies, the team constructs a highly diversified portfolio typically containing over 200 stocks.
The investment process incorporates ESG considerations in several different ways: exclusions, integration, research and engagement. In terms of integration into stock selection, based on our research we allocate more capital to stocks with good ESG characteristics and penalise those which are poor. In addition to the ESG aspects of the strategy, stock selection is grounded in the analysis of company fundamentals indicating Value and Quality, and portfolios will typically exhibit a style bias towards both of these factors.
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Primary fund last amended: Apr 2024 |
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Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Sustainability policy
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
UN Sustainable Development Goals (SDG) focus
Find funds that specifically aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Report against sustainability objectives
Find funds that publicly report their performance against specifically named sustainability objectives (in addition to reporting their financial performance) Environmental - General
Environmental policy
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
Limits exposure to carbon intensive industries
Funds that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change. Funds vary - some funds may be 'underweight' in this area which means they may have some investment in highly carbon intensive areas. Funds of this kind may choose companies they consider to be 'best in sector' and encourage ever higher standards. Strategies vary. See fund information for further details.
Favours cleaner, greener companies
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail. Nature & Biodiversity
Biodiversity / nature policy
Find funds that have a written biodiversity policy or theme aimed at encouraging and improving environmental protection and safeguarding the natural world (sometimes referred to as the preservation or enhancement of 'natural capital'). See eg https://www.un.org/en/climatechange/science/climate-issues/biodiversity
Deforestation / palm oil policy
Find funds that have policies in place designed to ensure they do not invest in companies that are significantly involved in deforestation. This typically relates to palm oil plantations where biodiversity loss is a major concern (as well as other issues). Strategies vary. See fund information for further detail.
Responsible palm oil policy
Fund has a responsible palm oil policy which is likely to focus on the producers of palm oil and deforestation issues with a view to informing investment decisions (and / or engagement) to support and encourage high standards.
Water stewardship policy
Fund has a policy which sets out their expectations for how investee assets should manage water Climate Change & Energy
Climate change / greenhouse gas emissions policy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
Coal, oil & / or gas majors excluded
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Fracking and tar sands excluded
Funds that avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary. See fund information for further information.
Arctic drilling exclusion
Funds that avoid companies that are involved in extracting oil from the Arctic regions. See fund literature for further details.
Clean / renewable energy theme or focus
Find funds where investment in clean / renewable energy companies an other assets is central to their investment selection strategy. The proportion of the fund that is directly or indirectly invested in renewable energy varies between funds and over time. See fund information for further details.
Encourage transition to low carbon through stewardship activity
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Energy efficiency theme
Fund funds that have an energy efficiency theme - typically meaning that a fund manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Invests in clean energy / renewables
Funds that hold companies in the clean energy and renewable energy sectors (at the time research was supplied). Fund strategies vary, in particular the proportion of investment in these areas may vary significantly. Check fund literature for details.
Nuclear exclusion policy
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail.
Fossil fuel exploration exclusion - direct involvement
The fund manager excludes companies with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
TCFD reporting requirement (Becoming IFRS)
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/ Social / Employment
Social policy
Find funds that have policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). Funds with social policies typically avoid companies with low standards or work to encourage higher standards. See fund information for detail.
Labour standards policy
Find funds that have a labour standards policy - which can be expected to mean that the fund will invest in / favour companies that have higher standards in this area - although fund strategies can vary significantly (as with all policy areas). See eg https://www.ilo.org/international-labour-standards
Favours companies with strong social policies
Find funds that invest in line with positive strategies that relate to 'people' issues - such as having strong human rights, labour standards and equal opportunities practices. Such funds are likely to invest in companies that have market leading standards with regard to employee and supplier practices. Read fund literature for further information.
Health & wellbeing policies or theme
Find funds with policies or themes that set out their approach to health and wellbeing issues. Funds of this kind typically aim to invest in companies with high standards - or encourage high standards. Themed funds are likely to have more of an emphasis on this area. Strategies vary. See fund information for further detail.
Diversity, equality & inclusion Policy (fund level)
Find individual funds that have a written diversity policy – where the fund manager will aim to select companies with a carefully considered, sound approach to diversity. This should ideally cover a range of issues including gender, ethnicity, disability, beliefs, sexual orientation, etc. Ethical Values Led Exclusions
Ethical policies
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
Tobacco and related product manufacturers excluded
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Armaments manufacturers avoided
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Civilian firearms production exclusion
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Alcohol production excluded
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Gambling avoidance policy
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Pornography avoidance policy
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information. Human Rights
Responsible supply chain policy or theme
Find funds that have policies or a theme that relates to the responsible management of supply chains. These may relate to employment issues, notably people employed by their suppliers, as well as the sourcing of materials and products. See fund literature for further information. Banking & Financials
Predatory lending exclusion
Fund excludes financial services companies with widely criticised, aggressive lending practices where interest rates are typically very high, includes ‘doorstep lending’) Governance & Management
Governance policy
Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices. Strategies vary. See fund literature for further information.
Avoids companies with poor governance
Find funds that aim to avoid investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards. See fund literature for further information.
UN sanctions exclusion
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Encourage board diversity e.g. gender
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Encourage higher ESG standards through stewardship activity
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity Fund Governance
ESG integration strategy
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature. Asset Size
Over 50% large cap companies
Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Invests in small, mid and large cap companies / assets
Find a fund that invests in a combination of small, medium and larger (potentially multinational)companies. Impact Methodologies
Measures positive impacts
Funds that aim to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Funds that aim to deliver positive impacts and measure those impacts may be referred to as 'impact funds' - although impact measurement is not restricted to impact funds. Strategies vary. See fund information.
Invests in sustainability / ESG disruptors
Find funds that specifically set out to invest in companies that are regarded as 'disrupting' existing business practices - typically through the development of innovative (sustainability aware) products and/or practices.
Aim to deliver positive impacts through engagement
Fund aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets How The Fund Works
Positive selection bias
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Negative selection bias
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
ESG weighted / tilt
Find funds that invest more heavily in those that have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to a fund's strategy you should expect it to invest in most sectors. Strategies vary.
Data led strategy
Find funds that make stock selection (and ongoing fund management) decisions based on ESG data or company ratings (normally supplied by third parties) rather than focusing on what individual companies do, how they operate or their plans for the future
Assets mapped to SDGs
Find funds that have 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Combines norms based exclusions with other SRI criteria
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Balances company 'pros and cons' / best in sector
Find funds that consider both the 'positive' and 'negative' aspects of company behaviour and make balanced, considered decisions as part of their investment approach. May apply to a range of different issues and policy areas.
SRI / ESG / Ethical policies explained on website
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies). Intended Clients & Product Options
Intended for investors interested in sustainability
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Intended for clients who want to have a positive impact
Finds funds designed to meet the needs of individual investors with an interest in ‘Impact investment funds’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Portfolio SRI / ESG options available (DFMs)
Only applicable for DFM’s & portfolio providers. Finds those that offer an SRI / ESG portfolio option
Multiple SRI / ESG portfolio options available (DFMs)
Only applicable for DFM’s & portfolio providers. Find service providers who offer multiple SRI / ESG portfolio options Labels & Accreditations
SFDR Article 8 fund / product (EU)
Finds funds classified under Article 8 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 8 of the SFDR is a set of requirements that apply to financial products that 'promote' environmental or social characteristics with high governance also. These rules do not currently apply to UK funds so many managers may leave this field blank. Engagement Approach
Engaging on climate change issues
Fund manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Engaging with fossil fuel companies on climate change
Asset manager has a stewardship /responsible ownership strategy that involves working with fossil fuel companies on climate change related issues. See fund manager website for details.
Engaging to reduce plastics pollution / waste
Asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
Engaging on biodiversity / nature issues
The asset manager has a responsible ownership / stewardship strategy that focuses on biodiversity and nature issues relating to the assets they invest the aim of which will be to reduce harm and or deliver improvement. Strategies vary. https://tnfd.global
Engaging on labour / employment issues
Asset manager has responsible ownership / stewardship strategy in place that aims to improve labour standards for the benefit of employees in investee companies (and potentially their suppliers)
Engaging on governance issues
Fund managers have stewardship strategies in place that focus on improving governance standards across investee assets
Engaging on responsible supply chain issues
Has a stewardship / responsible ownership strategy that encourages responsible supply chain - ie the managers will discuss environmental, social and governance issues with investee companies with the aim of raising standards Transparency
Dialshifter statement
Find fund management companies that have supplied Dialshifter information. See Dialshifter tab within record for more information. Sustainable, Responsible &/or ESG Policy:Whilst the Schroder ISF QEP Global ESG fund does not have an explicit sustainable investment objective, it promotes environmental or social characteristics.
The fund’s characteristics policy indicates that it must maintain a higher overall sustainability score than the MSCI AC World (Net TR) index, based on the Investment Manager’s rating system. This benchmark (which is a broad market index) does not take into account the environmental and social characteristics promoted by the Fund.
The Fund also promises to invests at least 40% of its assets in sustainable investments, which are investments that the Investment Manager expects to contribute towards the advancement of one or more environmental and/or social objective(s).
QEP’s approach to not causing significant harm to any environmental or social sustainable investment objective includes the following: Firm-wide exclusions apply to Schroders funds. These relate to international conventions on cluster munitions, anti-personnel mines, and chemical and biological weapons. A detailed list of all companies that are excluded is available at https://www.schroders.com/en/sustainability/active-ownership/group-exclusions/.
Schroders became a signatory to the UN Global Compact (UNGC) principles on 6 January 2020. The Fund excludes companies in violation of the UNGC principles from the portion of the portfolio in sustainable investments, as Schroders considers violators cause significant harm to one or more environmental or social sustainable investment objectives. The areas determining whether an issuer is an UNGC violator include issues that are covered by the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, such as human rights, bribery and corruption, labour rights, child labour, discrimination, health and safety, and collective bargaining. The list of UNGC violators is provided by a third party and compliance with the list is monitored via our automated compliance controls. Exceptions may apply, if there is evidence to demonstrate that the company has addressed the violation and is not causing significant harm as described above.
The Fund also excludes companies that derive revenues above certain thresholds from activities related to tobacco and thermal coal, especially tobacco production, tobacco value chain (suppliers, distributors, retailers, licensors), thermal coal mining and coal fired power generation. Please see the fund’s sustainability disclosures for specific thresholds for mentioned activities.
The Fund may also apply certain other exclusions.
Further information on all of the Fund’s exclusions is to be found further below in the “Monitoring of environmental or social characteristics” section.
Wherever the Investment Manager deems possible, in the context of an incomplete and developing data landscape, the Investment Manager sets levels or principles for what would be deemed to cause significant harm by applying appropriate values in relation to the principal adverse impacts applicable to sustainable products. Investee companies deemed to be in breach of these levels would not be eligible to be considered as a sustainable investment. Our framework is subject to ongoing review, particularly as the availability, and quality, of the data evolves.
We use a list of UNGC violators as provided by a third party. Issuers on that list cannot be categorised as sustainable investments. The areas considered when determining whether an issuer is an UNGC violator include those covered by the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, such as human rights, bribery and corruption, labour rights, child labour, discrimination, health and safety, and collective bargaining.
Process:Within our approach to both stock selection and portfolio construction, we fully integrate Environmental, Social and Governance (ESG) considerations across the full suite of QEP Investment Strategies alongside our focus on traditional fundamental measures. The breadth of opportunities available in global equities allows for the full integration of ESG considerations without having to sacrifice potential returns. We would argue that incorporating ESG enhances performance, providing it is integrated in an investment led manner, and that ESG considerations are likely to become increasingly additive in the future.
The QEP investment process integrates ESG considerations in the following ways across all QEP investment strategies:
The QEP Investment Team has access to well over a hundred data points related to ESG issues covering a wide range of areas. External sources include MSCI, Thomson Reuters Refinitiv, Sustainalytics, Bloomberg, BoardEx, World Bank, UN, & OECD. The raw data items are subject to rigorous daily checking before use in our process. Additionally, Schroders subscribe to Institutional Shareholder Services and the Investment Association’s Institutional Voting Information Service for proxy voting research carried out by in-house corporate governance analysts.
All research which shapes the investment process and therefore drives investment decisions is internal and proprietary to QEP, but we use third-party data to support our assessment of ESG issues via our proprietary QEP ESG rank which is the primary method we employ for integrating sustainability considerations across our strategies. This rank analyses all stocks in our investable universe to scalably provide an assessment of each stock's sustainability profile. Our approach avoids the pitfalls of mechanistic or passive based approaches by carefully selecting the most objective inputs to capture specific risks that are material to different industries, reflecting both absolute and relative considerations. We draw upon the resources of Schroders’ Sustainable Investment team and a variety of data vendors to blend both traditional and ESG specific data sources, ultimately converting a variety of raw inputs into useable investment insights. Dialshifter (Fund)Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by… In December 2020, we joined 29 other global asset managers representing more than $9tn of assets in launching the Net Zero Asset Managers Initiative. As part of the initiative we have committed to:
SDR Labelling:Not eligible to use label Fund HoldingsDisclaimerRisk Considerations - Schroder International Selection Fund (ISF) QEP Global ESG The following risks may affect fund performance:
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