Schroder International Selection Fund (ISF) QEP Global ESG Fund
SRI Style:
ESG Plus
SDR Labelling:
Not eligible to use label (out of scope)
Product:
SICAV/Overseas
Fund Region:
Global
Fund Asset Type:
Equity
Launch Date:
24/09/2015
Last Amended:
Apr 2024
Dialshifter (
):
Fund/Portfolio 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
Has 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 individual entry information.
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).
Publicly report performance against named sustainability objectives
Environmental - General
Has policies which relate to environmental issues. These will typically set out their stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary.
Options that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change). Strategies vary.
Aims to invest in companies with strong or market leading environmental policies and practices. Strategies vary. See individual entry information for more detail.
Nature & Biodiversity
Has a written biodiversity policy or theme typically aimed at supporting, encouraging and improving environmental protection and safeguarding the natural world (sometimes referred to as 'natural capital'). See eg https://www.un.org/en/climatechange/science/climate-issues/biodiversity
Has policies designed to address involvement in irresponsibly managed palm oil or other forms of deforestation (typically exclusion led). Strategies vary.
Has a responsible palm oil policy - typically likely to divert investment away from poor practices.
Has a policy which sets out their expectations for how investee assets should manage their use of water - likely to focus on high users.
Climate Change & Energy
Has 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.
Avoid investment in major coal, oil and/or gas (extraction) companies. Strategies vary.
Avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary.
Avoid companies that are involved in extracting oil from the Arctic regions.
Invest (or may invest) in clean / renewable energy companies and other assets. The proportion directly or indirectly invested in renewable energy may vary over time.
Encourage the transition to lower carbon activities through asset selection and / or responsible ownership activity.
Has an energy efficiency theme - typically meaning that the 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.
Invest in renewable energy companies and / or companies where renewable energy is a significant part of their business. Strategies vary.
Has a policy which describes the avoidance or limited investment in the nuclear industry. Strategies vary.
Excludes companies and other assets with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
Will only invest in companies that report greenhouse gas emissions in line with this international reporting framework. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/
Social / Employment
Has policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and/or adherence to internationally recognised codes such as the UN Global Compact). Strategies with social policies typically avoid companies with low standards and/or work to encourage higher standards. See fund information for detail.
Has a labour standards policy - likely to mean they will invest in / favour companies that have higher employment related standards and avoid those with low standards. Strategies vary. See eg https://www.ilo.org/international-labour-standards
Aims to invest in assets with high social values - this may include strong human rights, labour standards and equal opportunities or safety related practices.
Has policies or themes that set out their approach to health and wellbeing issues, typically aims to invest in companies with high standards - or encourage high standards.
Has a written diversity policy – where the manager will aim to select companies with a carefully considered, positive employment standards. This may cover a range of issues including gender, ethnicity, disability, beliefs and sexual orientation.
Ethical Values Led Exclusions
Has policies that set out their position on ethical or 'personal values' based issues. Strategies vary.
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.
Avoids companies that manufacture weapons intended specifically for military use. Strategies vary - may or may not include non-strategic military products.
Has 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.
Avoids companies that produce alcohol. Strategies vary; some may allow a small proportion of revenue to come from this area.
Avoids companies with significant involvement in the gambling industry. Some may allow a small proportion of revenues to come from this area.
Avoids companies that derive significant income from pornography and related areas. Strategies vary.
Human Rights
Has 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.
Banking & Financials
Excludes financial services companies with widely criticised, aggressive lending practices where interest rates are typically very high, (eg ‘doorstep lending’)
Governance & Management
Has 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.
Avoids 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.
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity
Product / Service Governance
Find fund / asset managers 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
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 a combination of small, medium and larger (potentially multinational) companies / assets.
Impact Methodologies
Aims to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Investments that aim to deliver positive impacts and measure those impacts may be referred to as 'Impact' - although impact measurement is not restricted to Impact investments. Strategies vary.
Specifically sets 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.
Aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets
How The Fund/Portfolio Works
Focuses on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Has principle 'ethical approach' to avoid companies by using negative screening criteria. Strategies vary.
Invest more heavily in assets which have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to the strategy you should expect assets in most sectors. Strategies vary.
Makes stock selection (and ongoing 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
Invests in assets which can be 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Investment selection process uses internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Considers both the 'positive' and 'negative' aspects of company behaviour and makes balanced, considered decisions as part of their investment approach. May apply to a range of different issues and policy areas.
Publish explanations of their ethical, social and/or environmental policies online (i.e. investment decision making strategies/ buy/sell &/or asset management strategies).
Intended Clients & Product Options
Designed to meet the needs of individual investors with an interest in sustainability issues.
Designed to meet the needs of individual investors with an interest in ‘Impact investment’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies regarded as beneficial to people and / or the planet. Strategies vary.
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
Find options 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 together with high governance. These rules do not currently apply to UK products so many managers may leave this field blank.
Collaborations & Affiliations
Find fund / asset management companies that have partnered with Fund EcoMarket - meaning that they are helping to improve access to information on sustainable and responsible investment by paying an annual fee to us which enables us to publish information for free. Partner funds are listed ahead of other funds and have their logos displayed.
Engagement Approach
Fund / asset manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Fund / 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.
Fund / asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
The fund / 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
Fund / 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 / asset 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 / asset 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.
SDR Labelling:
Not eligible to use label (out of scope)
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 (out of scope) | SICAV/Overseas | 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/Portfolio 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
Has 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 individual entry information.
UN Sustainable Development Goals (SDG) focus
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
Publicly report performance against named sustainability objectives Environmental - General
Environmental policy
Has policies which relate to environmental issues. These will typically set out their stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary.
Limits exposure to carbon intensive industries
Options that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change). Strategies vary.
Favours cleaner, greener companies
Aims to invest in companies with strong or market leading environmental policies and practices. Strategies vary. See individual entry information for more detail. Nature & Biodiversity
Biodiversity / nature policy
Has a written biodiversity policy or theme typically aimed at supporting, encouraging and improving environmental protection and safeguarding the natural world (sometimes referred to as 'natural capital'). See eg https://www.un.org/en/climatechange/science/climate-issues/biodiversity
Deforestation / palm oil policy
Has policies designed to address involvement in irresponsibly managed palm oil or other forms of deforestation (typically exclusion led). Strategies vary.
Responsible palm oil policy
Has a responsible palm oil policy - typically likely to divert investment away from poor practices.
Water stewardship policy
Has a policy which sets out their expectations for how investee assets should manage their use of water - likely to focus on high users. Climate Change & Energy
Climate change / greenhouse gas emissions policy
Has 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.
Coal, oil & / or gas majors excluded
Avoid investment in major coal, oil and/or gas (extraction) companies. Strategies vary.
Fracking & tar sands excluded
Avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary.
Arctic drilling exclusion
Avoid companies that are involved in extracting oil from the Arctic regions.
Clean / renewable energy theme or focus
Invest (or may invest) in clean / renewable energy companies and other assets. The proportion directly or indirectly invested in renewable energy may vary over time.
Encourage transition to low carbon through stewardship activity
Encourage the transition to lower carbon activities through asset selection and / or responsible ownership activity.
Energy efficiency theme
Has an energy efficiency theme - typically meaning that the 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
Invest in renewable energy companies and / or companies where renewable energy is a significant part of their business. Strategies vary.
Nuclear exclusion policy
Has a policy which describes the avoidance or limited investment in the nuclear industry. Strategies vary.
Fossil fuel exploration exclusion - direct involvement
Excludes companies and other assets with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
TCFD / IFRS reporting requirement
Will only invest in companies that report greenhouse gas emissions in line with this international reporting framework. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/ Social / Employment
Social policy
Has policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and/or adherence to internationally recognised codes such as the UN Global Compact). Strategies with social policies typically avoid companies with low standards and/or work to encourage higher standards. See fund information for detail.
Labour standards policy
Has a labour standards policy - likely to mean they will invest in / favour companies that have higher employment related standards and avoid those with low standards. Strategies vary. See eg https://www.ilo.org/international-labour-standards
Favours companies with strong social policies
Aims to invest in assets with high social values - this may include strong human rights, labour standards and equal opportunities or safety related practices.
Health & wellbeing policies or theme
Has policies or themes that set out their approach to health and wellbeing issues, typically aims to invest in companies with high standards - or encourage high standards.
Diversity, equality & inclusion Policy (product level)
Has a written diversity policy – where the manager will aim to select companies with a carefully considered, positive employment standards. This may cover a range of issues including gender, ethnicity, disability, beliefs and sexual orientation. Ethical Values Led Exclusions
Ethical policies
Has policies that set out their position on ethical or 'personal values' based issues. Strategies vary.
Tobacco & 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
Avoids companies that manufacture weapons intended specifically for military use. Strategies vary - may or may not include non-strategic military products.
Civilian firearms production exclusion
Has 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
Avoids companies that produce alcohol. Strategies vary; some may allow a small proportion of revenue to come from this area.
Gambling avoidance policy
Avoids companies with significant involvement in the gambling industry. Some may allow a small proportion of revenues to come from this area.
Pornography avoidance policy
Avoids companies that derive significant income from pornography and related areas. Strategies vary. Human Rights
Responsible supply chain policy or theme
Has 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. Banking & Financials
Predatory lending exclusion
Excludes financial services companies with widely criticised, aggressive lending practices where interest rates are typically very high, (eg ‘doorstep lending’) Governance & Management
Governance policy
Has 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.
Avoids companies with poor governance
Avoids 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.
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
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
Aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity Product / Service Governance
ESG integration strategy
Find fund / asset managers 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
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 & large cap companies / assets
Invests in a combination of small, medium and larger (potentially multinational) companies / assets. Impact Methodologies
Measures positive impacts
Aims to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Investments that aim to deliver positive impacts and measure those impacts may be referred to as 'Impact' - although impact measurement is not restricted to Impact investments. Strategies vary.
Invests in sustainability / ESG disruptors
Specifically sets 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
Aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets How The Fund/Portfolio Works
Positive selection bias
Focuses 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
Has principle 'ethical approach' to avoid companies by using negative screening criteria. Strategies vary.
ESG weighted / tilt
Invest more heavily in assets which have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to the strategy you should expect assets in most sectors. Strategies vary.
Data led strategy
Makes stock selection (and ongoing 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
Invests in assets which can be '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
Investment selection process uses internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Balances company 'pros and cons' / best in sector
Considers both the 'positive' and 'negative' aspects of company behaviour and makes 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
Publish explanations of their ethical, social and/or environmental policies online (i.e. investment decision making strategies/ buy/sell &/or asset management strategies). Intended Clients & Product Options
Intended for investors interested in sustainability
Designed to meet the needs of individual investors with an interest in sustainability issues.
Intended for clients who want to have a positive impact
Designed to meet the needs of individual investors with an interest in ‘Impact investment’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies regarded as beneficial to people and / or the planet. Strategies vary.
Portfolio SRI / ESG options available
Only applicable for DFM’s & portfolio providers. Finds those that offer an SRI / ESG portfolio option
Multiple SRI / ESG portfolio options available
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)
Find options 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 together with high governance. These rules do not currently apply to UK products so many managers may leave this field blank. Collaborations & Affiliations
Fund EcoMarket partner
Find fund / asset management companies that have partnered with Fund EcoMarket - meaning that they are helping to improve access to information on sustainable and responsible investment by paying an annual fee to us which enables us to publish information for free. Partner funds are listed ahead of other funds and have their logos displayed. Engagement Approach
Engaging on climate change issues
Fund / asset manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Engaging with fossil fuel companies on climate change
Fund / 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
Fund / asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
Engaging on biodiversity / nature issues
The fund / 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
Fund / 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 / asset 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 / asset 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 (Corporate)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 (out of scope) Fund HoldingsDisclaimerRisk Considerations - Schroder International Selection Fund (ISF) QEP Global ESG The following risks may affect fund performance:
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