Dimensional Global Short Fixed Income Lower Carbon ESG Screened Fund
SRI Style:
Sustainability Tilt
SDR Labelling:
Not eligible to use label
Product:
SICAV/Offshore
Fund Region:
Global
Fund Asset Type:
Fixed Interest
Launch Date:
15/12/2021
Last Amended:
Jun 2023
Dialshifter (
):
Fund Size:
£186.71m
(as at: 31/12/2022)
Total Screened Themed SRI Assets:
£45025.00m
(as at: 31/12/0002)
Total Responsible Ownership Assets:
£18073.00m
(as at: 31/12/2022)
Total Assets Under Management:
£482528.00m
(as at: 31/12/2022)
ISIN:
IE000MBVK9Q9
Contact Us:
Objectives:
Dimensional employs a systematic, process-driven approach to build fixed income portfolios. The strategy integrates key sustainability considerations within a market-driven approach using current market prices to target higher expected returns in global government and credit securities.
The strategy invests in investment-grade sovereign, government agency, supranational, corporate debt, and cash equivalents issued in approved currencies and across eligible developed markets, with a maximum maturity of five years (from the date of settlement). Sustainability screens are applied to corporate bonds, supranational organisations, and non-sovereign governmental agencies.
The aim is to maximise total returns from the universe of debt instruments in which the Fund invests. Total return seeks to generate both income and capital appreciation.
The Fund is actively managed which means that the Investment Manager is actively making investment decisions for the Fund. The Fund is not managed in reference to a benchmark.
Sustainable, Responsible
&/or ESG Overview:
The Fund integrates key sustainability considerations within a transparent, market-driven approach using current market prices to target higher expected returns in investment-grade global government and credit securities.
The fund is designed to address the issues most important to environmentally focused investors without compromising on sound investment principles.
Dimensional uses a combination of internal and external data to evaluate issuers on a focused set of sustainability concerns. The primary sustainability consideration of this approach is environmental impact from company emissions, including greenhouse gas emissions and potential emissions from fossil fuel reserves. Other sustainability considerations, such as land use and biodiversity, toxic spills and releases, operational waste, and water management are also incorporated into an environmental score. Issuers with an association to other social sustainability considerations may also be excluded.
For more information on how sustainability is implemented, please refer to Dimensional’s 2022 Responsible Investment survey
Primary fund last amended:
Jun 2023
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 which substantially focus on sustainability issues
Find funds where there is a significant emphasis on (environmental and social) sustainability. Funds with a 'sustainability theme' typically place more emphasis on the area than funds with a 'sustainability policy' - meaning that it is more likely to drive investment selection. Strategies vary. See fund information for further detail.
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 have written policies explaining the approach they take when companies damage the environment or are significant polluters. Funds of this kind may work with companies to encourage higher standards, or exclude companies - sometimes dependent on the situation. Strategies vary. See fund information for further detail.
Find funds that have a written policy or theme on waste management - typically a view to encouraging higher levels of recycling and better efficiency / reducing waste.
Nature & 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.
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 investing in companies with coal, oil and gas reserves. See fund information for further details.
Ethical Values Led Exclusions
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 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 in place to ensure they do not invest in companies that employ children.
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.
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 a fund that invests in a combination of small, medium and larger (potentially multinational)companies.
How The Fund Works
Find funds with few exclusions - typically for example exclude tobacco or companies that breach commonly adopted standards or norms such as the UN Global Compact.
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 have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) with additional criteria such as positive and/or negative screens, themes and 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.
Fund invests in assets that have not passed its usual sustainability criteria or screening standards in order to help manage investment risk. This may be limited or significant. See literature.
Unscreened Assets & Cash
All assets held in the fund - except cash - meet the sustainability criteria published in fund documentation.
Intended Clients & Product Options
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
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.
Fund Management Company Information
About The Business
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
Find fund management companies that actively encourage higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Find fund managers that consider responsible ownership and ESG to be a key differentiator for their business.
Find funds run by fund managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Collaborations & Affiliations
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
Fund management entity is a member of the Investment Association https://www.theia.org/
Resources
Find fund management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Find fund management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors.
Accreditations
Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave like responsible, typically longer term 'company owners'.
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 responsible ownership / stewardship strategy in place which aims to address human rights issues in investee companies (and potentially their suppliers) with the aim of raising standards
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)
Asset management company has a stewardship strategy in place which involves working to raise diversity, equality and inclusion standards across investee assets
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
Climate & Net Zero Transition
This asset management company plans to achieve net zero greenhouse gas (CO2e) emissions with the help of a scheme that will lock away an amount of carbon that is equivalent to the company’s own emissions – so that the end result is ‘net zero’. Calculations and scope vary.
Find fund management companies that are working to reduce their own (fund management company) carbon/greenhouse gas emissions.
Transparency
Find fund management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Find companies that publish information about their sustainable and responsible investment strategies on their company website.
Find fund management companies that will supply information about their sustainable and responsible investment activity on request.
Fund management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards.
Find fund management companies that have supplied Dialshifter information. See Dialshifter tab within record for more information.
Sustainable, Responsible &/or ESG Policy:
The Fund is primarily designed to decrease exposure to issuers that are significant contributors to emissions or those with large fossil fuel reserves (such as oil, gas, and coal) that may lead to future emissions. Other environmental and social sustainability considerations are also incorporated in the strategy.
Dimensional takes sustainability considerations into account through a combination of portfolio-level exclusions and sector-level weighting designed to reduce exposure to bonds from issuers with less sustainable business practices. At the portfolio level, issuers that would otherwise be eligible for investment are ranked on an environmental sustainability score. Greenhouse gas emissions intensity accounts for 85% of the total score and other environmental factors—land use and biodiversity, involvement in toxic spills or releases, operational waste, and water management—account for the remaining 15%. The lowest-scoring 10% of issuers by market value are excluded from purchase. Also excluded are issuers with high total fossil fuel reserves that may lead to future emissions.
At the sector level, issuers within each sector of the Bloomberg Global Aggregate Corporate 1-5 Year Index are ranked by total emissions intensity. Within each sector, a higher-than-market weight is targeted in bonds with better emissions profiles, and a lower-than-market weight is targeted in bonds with poor emissions profiles.
Finally, corporate issuers with an association to other social sustainability issues—such as coal, palm oil, factory farming, child labor, tobacco, controversial weapons, and civilian firearms—are generally excluded from purchase.
We further address the primary consideration of global warming effects from emissions through weighting of corporate holdings within their sector classifications. Issuers within each sector of the Bloomberg Global Aggregate Corporate Index are ranked by total emissions intensity. A higher than market weight is targeted in bonds with better emissions profiles within each sector, and a lower than market weight is targeted in bonds with poor emissions profiles within each sector. Agency and supranational issuers whose GHG emissions intensity is within the worst 10% of the corporate universe are generally excluded.
By addressing emissions considerations at the portfolio level and within sectors, we seek to achieve a significant reduction in the portfolio’s exposure to greenhouse gas emissions intensity and potential emissions from reserves while maintaining broad diversification and focusing on higher expected returns.
Additional screens address issuers with meaningful exposure to coal, palm oil, factory farming, adult entertainment, alcohol, gambling, tobacco, civilian firearms, controversial weapons, nuclear weapons, and child labour. Generally, issuers connected with these issues can be excluded without a significant impact to diversification.
Process:
Dimensional employs a systematic, process-driven approach to build fixed income portfolios. The Global Sustainability Short Fixed Income Fund integrates key sustainability considerations within a market-driven approach to target higher expected returns in global government and credit securities. The Fund targets a duration in a range around that of the Bloomberg Global Aggregate Bond Index 1-5 Years.
Applying sustainability considerations
Dimensional takes sustainability considerations into account through a combination of portfolio-level exclusions and sector-level weighting designed to reduce exposure to bonds issued by companies with less sustainable business practices. At the portfolio level, issuers that would otherwise be eligible for investment are ranked on an environmental sustainability score. Greenhouse gas emissions intensity accounts for 85% of the total score and other environmental factors—land use and biodiversity, involvement in toxic spills or releases, operational waste, and water management—account for the remaining 15%. The lowest-scoring 10% of issuers by market value are excluded from purchase. Issuers with high potential emissions from reserves may also be excluded.
At the sector level, issuers within each sector of the Bloomberg Global Aggregate Corporate Index are ranked by total emissions intensity. Within each sector, a higher-than-market weight is targeted in bonds with better emissions profiles, and a lower-than-market weight is targeted in bonds with poor emissions profiles. Finally, corporate issuers with an association to other social sustainability issues are generally excluded from purchase.
ESG data sources
For Dimensional’s social and sustainability strategies, Dimensional uses a combination of internal and external data to systematically evaluate companies on ESG issues. Dimensional has spent a significant amount of time and effort evaluating ESG data providers and new datasets as they become available. We use multiple ESG vendors for data on carbon emissions and fossil fuel reserves. We compare these datasets against each other to develop an enhanced set of carbon emissions data. We also invest in our own datasets drawn from our research and portfolio management teams. Examples of this include our proprietary datasets on companies involved with factory farming and palm oil. We also subscribe to data on companies engaged in certain business activities and use several vendors of proxy voting data to better inform how we exercise our proxy votes.
Dimensional’s Portfolio Management team also uses internally generated tools to track and evaluate data from third-party providers and their potential impact on portfolios. They use internal processes and tools to evaluate and monitor data from MSCI, ISS, Bloomberg, company filings, news reports, and other sources on portfolio companies with potential environmental or social controversies, as well as information on corporate governance and corporate actions. Dimensional’s Research team uses internally generated tools to integrate ESG-related data into our Investment Analytics and Data systems.
Resources, Affiliations & Corporate Strategies:
Dimensional’s team-based ESG approach combines a dedicated Responsible Investment team and a dedicated Investment Stewardship Group with ESG specialists and contributors throughout Dimensional.
The Responsible Investment team sits within the Portfolio Management team, and the Head of Responsible Investment reports to Dimensional’s Global Head of Portfolio Management. The Responsible Investment team coordinates Dimensional’s ESG strategy across areas such as ESG product design, data, ESG regulatory requirements, ESG research, and ESG thought leadership. The team’s efforts are supported by Dimensional’s ESG Steering Committee and regional ESG working groups.
The Investment Stewardship Group manages Dimensional’s global stewardship activities. The group sits within Dimensional’s Portfolio Management department and consists of dedicated stewardship personnel who work closely with Portfolio Managers. The group implements policies through proxy voting and by communicating directly with boards and management of portfolio companies, monitors day-to-day operations, and conducts research on governance-related matters under the supervision of Dimensional’s Investment Stewardship Committee.
The work of Dimensional’s dedicated ESG functions is supported by cross-functional resources embedded across Dimensional’s Research, Portfolio Management, and Investment Analytics and Data teams. As of December 31, 2022, more than 60 investment professionals contribute to ESG initiatives across our global offices
From a governance perspective, Dimensional’s stewardship efforts are overseen by the Investment Stewardship Committee, a subcommittee of Dimensional’s Investment Committee. To learn more about the Investment Stewardship Committee, see the Investment Stewardship section.
Additionally, Dimensional’s ESG Steering Committee is a collaborative group composed of key contributors to ESG-related initiatives across departments and regions, including representatives from Portfolio Management, Research, Investment Solutions, Legal, and Corporate Services. The ESG Steering Committee’s role is to strategically coordinate and communicate Dimensional’s efforts across business functions to deliver a cohesive approach to ESG that is informed by our clients’ needs.
Memberships and groups
Dimensional became a signatory to the United Nations Principles for Responsible Investment (UN PRI) in August 2012. Dimensional is a member of various organizations that work to improve transparency and accountability regarding corporate governance issues by both investors and portfolio companies. Dimensional is a signatory to the UK Stewardship Code and the Japan Stewardship Code, and publicly supports the Task Force on Climate related Financial Disclosures, which is intended to promote consistent climate related financial risk disclosures by companies. Dimensional is also a member of the Council of Institutional Investors (CII), International Corporate Governance Network, and Harvard Institutional Investor Forum (HIIF), which are dedicated to promoting good corporate governance, and the Investment Company Institute (ICI), Global Investment Company Institute, and UK Investment Association (UKIA), which represent the interests of investment companies and investment managers and regularly are involved in commenting on the development of new laws and regulations that impact investment companies and issuers, including those that relate to ESG issues. Dimensional also comments on proposed rules promulgated by the SEC and other regulators regarding corporate governance and other matters to the extent the firm deems it appropriate.
Dialshifter
Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by…
There are a currently a number of different interpretations of how portfolio alignment with the goals of the Paris Agreement should be measured; for some people it means considering net zero commitments at portfolio companies, whereas for others it means considering whether current emissions are being reduced at the portfolio level in line with a Paris aligned trajectory. The EU Paris Aligned Benchmark (PAB) regulation requires a 50% reduction in emissions intensity versus the starting universe with a 7% year-over-year reduction on an ongoing basis.
Although they are not explicitly measured against this framework, nor do they claim alignment, our sustainability strategies across both equity and fixed income currently achieve a greater reduction in greenhouse gas emissions intensity, relative to their respective benchmarks, than is required under the PAB framework.
SDR Labelling:
Not eligible to use label
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
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|---|---|---|---|---|---|---|---|---|
Dimensional Global Short Fixed Income Lower Carbon ESG Screened Fund |
Sustainability Tilt | Not eligible to use label | SICAV/Offshore | Global | Fixed Interest | 15/12/2021 | Jun 2023 | |
ObjectivesDimensional employs a systematic, process-driven approach to build fixed income portfolios. The strategy integrates key sustainability considerations within a market-driven approach using current market prices to target higher expected returns in global government and credit securities.
The strategy invests in investment-grade sovereign, government agency, supranational, corporate debt, and cash equivalents issued in approved currencies and across eligible developed markets, with a maximum maturity of five years (from the date of settlement). Sustainability screens are applied to corporate bonds, supranational organisations, and non-sovereign governmental agencies.
The aim is to maximise total returns from the universe of debt instruments in which the Fund invests. Total return seeks to generate both income and capital appreciation. The Fund is actively managed which means that the Investment Manager is actively making investment decisions for the Fund. The Fund is not managed in reference to a benchmark.
|
Fund Size: £186.71m (as at: 31/12/2022) Total Screened Themed SRI Assets: £45025.00m (as at: 31/12/0002) Total Responsible Ownership Assets: £18073.00m (as at: 31/12/2022) Total Assets Under Management: £482528.00m (as at: 31/12/2022) ISIN: IE000MBVK9Q9 Contact Us: Joe.blackburn@dimensional.com |
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Sustainable, Responsible &/or ESG OverviewThe Fund integrates key sustainability considerations within a transparent, market-driven approach using current market prices to target higher expected returns in investment-grade global government and credit securities.
The fund is designed to address the issues most important to environmentally focused investors without compromising on sound investment principles.
Dimensional uses a combination of internal and external data to evaluate issuers on a focused set of sustainability concerns. The primary sustainability consideration of this approach is environmental impact from company emissions, including greenhouse gas emissions and potential emissions from fossil fuel reserves. Other sustainability considerations, such as land use and biodiversity, toxic spills and releases, operational waste, and water management are also incorporated into an environmental score. Issuers with an association to other social sustainability considerations may also be excluded.
For more information on how sustainability is implemented, please refer to Dimensional’s 2022 Responsible Investment survey |
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Primary fund last amended: Jun 2023 |
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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.
Sustainability focus
Find funds which substantially focus on sustainability issues
Sustainability theme or focus
Find funds where there is a significant emphasis on (environmental and social) sustainability. Funds with a 'sustainability theme' typically place more emphasis on the area than funds with a 'sustainability policy' - meaning that it is more likely to drive investment selection. Strategies vary. See fund information for further detail. 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.
Environmental damage and pollution policy
Funds that have written policies explaining the approach they take when companies damage the environment or are significant polluters. Funds of this kind may work with companies to encourage higher standards, or exclude companies - sometimes dependent on the situation. Strategies vary. See fund information for further detail.
Waste management policy or theme
Find funds that have a written policy or theme on waste management - typically a view to encouraging higher levels of recycling and better efficiency / reducing waste. Nature & 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. 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.
Fossil fuel reserves exclusion
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details. Ethical Values Led Exclusions
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.
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
Child labour exclusion
Find funds that have policies in place to ensure they do not invest in companies that employ children. 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.
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
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. How The Fund Works
Limited / few ethical exclusions
Find funds with few exclusions - typically for example exclude tobacco or companies that breach commonly adopted standards or norms such as the UN Global Compact.
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.
Combines ESG strategy with other SRI criteria
Find funds that have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) with additional criteria such as positive and/or negative screens, themes and 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.
Fund uses unscreened ‘diversifiers’ to help manage risk
Fund invests in assets that have not passed its usual sustainability criteria or screening standards in order to help manage investment risk. This may be limited or significant. See literature. Unscreened Assets & Cash
All assets (except cash) meet published sustainability criteria
All assets held in the fund - except cash - meet the sustainability criteria published in fund documentation. 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. 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. Fund Management Company InformationAbout The Business
Responsible ownership / stewardship policy or strategy (AFM company wide)
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
ESG / SRI engagement (AFM company wide)
Find fund management companies that actively encourage higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Responsible ownership / ESG a key differentiator (AFM company wide)
Find fund managers that consider responsible ownership and ESG to be a key differentiator for their business.
Responsible ownership policy for non SRI funds (AFM company wide)
Find funds run by fund managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
Integrates ESG factors into all / most (AFM) fund research
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
In-house diversity improvement programme (AFM company wide)
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex. Collaborations & Affiliations
PRI signatory
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
Investment Association (IA) member
Fund management entity is a member of the Investment Association https://www.theia.org/ Resources
In-house responsible ownership / voting expertise
Find fund management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Use specialist ESG / SRI / sustainability research companies
Find fund management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors. Accreditations
UK Stewardship Code signatory (AFM company wide)
Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave like responsible, typically longer term 'company owners'. 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 on human rights issues
Asset manager has responsible ownership / stewardship strategy in place which aims to address human rights issues in investee companies (and potentially their suppliers) with the aim of raising standards
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 diversity, equality and / or inclusion issues
Asset management company has a stewardship strategy in place which involves working to raise diversity, equality and inclusion standards across investee assets
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 Climate & Net Zero Transition
Carbon offsetting - offset carbon as part of our net zero plan (AFM company wide)
This asset management company plans to achieve net zero greenhouse gas (CO2e) emissions with the help of a scheme that will lock away an amount of carbon that is equivalent to the company’s own emissions – so that the end result is ‘net zero’. Calculations and scope vary.
In-house carbon / GHG reduction policy (AFM company wide)
Find fund management companies that are working to reduce their own (fund management company) carbon/greenhouse gas emissions. Transparency
Publish responsible ownership / stewardship report (AFM company wide)
Find fund management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Full SRI / responsible ownership policy information on company website
Find companies that publish information about their sustainable and responsible investment strategies on their company website.
Full SRI / responsible ownership policy information available on request
Find fund management companies that will supply information about their sustainable and responsible investment activity on request.
Publish full voting record (AFM company wide)
Fund management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards.
Dialshifter statement
Find fund management companies that have supplied Dialshifter information. See Dialshifter tab within record for more information. Sustainable, Responsible &/or ESG Policy:The Fund is primarily designed to decrease exposure to issuers that are significant contributors to emissions or those with large fossil fuel reserves (such as oil, gas, and coal) that may lead to future emissions. Other environmental and social sustainability considerations are also incorporated in the strategy.
Dimensional takes sustainability considerations into account through a combination of portfolio-level exclusions and sector-level weighting designed to reduce exposure to bonds from issuers with less sustainable business practices. At the portfolio level, issuers that would otherwise be eligible for investment are ranked on an environmental sustainability score. Greenhouse gas emissions intensity accounts for 85% of the total score and other environmental factors—land use and biodiversity, involvement in toxic spills or releases, operational waste, and water management—account for the remaining 15%. The lowest-scoring 10% of issuers by market value are excluded from purchase. Also excluded are issuers with high total fossil fuel reserves that may lead to future emissions.
At the sector level, issuers within each sector of the Bloomberg Global Aggregate Corporate 1-5 Year Index are ranked by total emissions intensity. Within each sector, a higher-than-market weight is targeted in bonds with better emissions profiles, and a lower-than-market weight is targeted in bonds with poor emissions profiles.
Finally, corporate issuers with an association to other social sustainability issues—such as coal, palm oil, factory farming, child labor, tobacco, controversial weapons, and civilian firearms—are generally excluded from purchase.
We further address the primary consideration of global warming effects from emissions through weighting of corporate holdings within their sector classifications. Issuers within each sector of the Bloomberg Global Aggregate Corporate Index are ranked by total emissions intensity. A higher than market weight is targeted in bonds with better emissions profiles within each sector, and a lower than market weight is targeted in bonds with poor emissions profiles within each sector. Agency and supranational issuers whose GHG emissions intensity is within the worst 10% of the corporate universe are generally excluded.
By addressing emissions considerations at the portfolio level and within sectors, we seek to achieve a significant reduction in the portfolio’s exposure to greenhouse gas emissions intensity and potential emissions from reserves while maintaining broad diversification and focusing on higher expected returns.
Additional screens address issuers with meaningful exposure to coal, palm oil, factory farming, adult entertainment, alcohol, gambling, tobacco, civilian firearms, controversial weapons, nuclear weapons, and child labour. Generally, issuers connected with these issues can be excluded without a significant impact to diversification.
Process:Dimensional employs a systematic, process-driven approach to build fixed income portfolios. The Global Sustainability Short Fixed Income Fund integrates key sustainability considerations within a market-driven approach to target higher expected returns in global government and credit securities. The Fund targets a duration in a range around that of the Bloomberg Global Aggregate Bond Index 1-5 Years.
Applying sustainability considerations Dimensional takes sustainability considerations into account through a combination of portfolio-level exclusions and sector-level weighting designed to reduce exposure to bonds issued by companies with less sustainable business practices. At the portfolio level, issuers that would otherwise be eligible for investment are ranked on an environmental sustainability score. Greenhouse gas emissions intensity accounts for 85% of the total score and other environmental factors—land use and biodiversity, involvement in toxic spills or releases, operational waste, and water management—account for the remaining 15%. The lowest-scoring 10% of issuers by market value are excluded from purchase. Issuers with high potential emissions from reserves may also be excluded.
At the sector level, issuers within each sector of the Bloomberg Global Aggregate Corporate Index are ranked by total emissions intensity. Within each sector, a higher-than-market weight is targeted in bonds with better emissions profiles, and a lower-than-market weight is targeted in bonds with poor emissions profiles. Finally, corporate issuers with an association to other social sustainability issues are generally excluded from purchase.
ESG data sources For Dimensional’s social and sustainability strategies, Dimensional uses a combination of internal and external data to systematically evaluate companies on ESG issues. Dimensional has spent a significant amount of time and effort evaluating ESG data providers and new datasets as they become available. We use multiple ESG vendors for data on carbon emissions and fossil fuel reserves. We compare these datasets against each other to develop an enhanced set of carbon emissions data. We also invest in our own datasets drawn from our research and portfolio management teams. Examples of this include our proprietary datasets on companies involved with factory farming and palm oil. We also subscribe to data on companies engaged in certain business activities and use several vendors of proxy voting data to better inform how we exercise our proxy votes.
Dimensional’s Portfolio Management team also uses internally generated tools to track and evaluate data from third-party providers and their potential impact on portfolios. They use internal processes and tools to evaluate and monitor data from MSCI, ISS, Bloomberg, company filings, news reports, and other sources on portfolio companies with potential environmental or social controversies, as well as information on corporate governance and corporate actions. Dimensional’s Research team uses internally generated tools to integrate ESG-related data into our Investment Analytics and Data systems.
Resources, Affiliations & Corporate Strategies:Dimensional’s team-based ESG approach combines a dedicated Responsible Investment team and a dedicated Investment Stewardship Group with ESG specialists and contributors throughout Dimensional.
The Responsible Investment team sits within the Portfolio Management team, and the Head of Responsible Investment reports to Dimensional’s Global Head of Portfolio Management. The Responsible Investment team coordinates Dimensional’s ESG strategy across areas such as ESG product design, data, ESG regulatory requirements, ESG research, and ESG thought leadership. The team’s efforts are supported by Dimensional’s ESG Steering Committee and regional ESG working groups.
The Investment Stewardship Group manages Dimensional’s global stewardship activities. The group sits within Dimensional’s Portfolio Management department and consists of dedicated stewardship personnel who work closely with Portfolio Managers. The group implements policies through proxy voting and by communicating directly with boards and management of portfolio companies, monitors day-to-day operations, and conducts research on governance-related matters under the supervision of Dimensional’s Investment Stewardship Committee.
The work of Dimensional’s dedicated ESG functions is supported by cross-functional resources embedded across Dimensional’s Research, Portfolio Management, and Investment Analytics and Data teams. As of December 31, 2022, more than 60 investment professionals contribute to ESG initiatives across our global offices
From a governance perspective, Dimensional’s stewardship efforts are overseen by the Investment Stewardship Committee, a subcommittee of Dimensional’s Investment Committee. To learn more about the Investment Stewardship Committee, see the Investment Stewardship section.
Additionally, Dimensional’s ESG Steering Committee is a collaborative group composed of key contributors to ESG-related initiatives across departments and regions, including representatives from Portfolio Management, Research, Investment Solutions, Legal, and Corporate Services. The ESG Steering Committee’s role is to strategically coordinate and communicate Dimensional’s efforts across business functions to deliver a cohesive approach to ESG that is informed by our clients’ needs.
Memberships and groups Dimensional became a signatory to the United Nations Principles for Responsible Investment (UN PRI) in August 2012. Dimensional is a member of various organizations that work to improve transparency and accountability regarding corporate governance issues by both investors and portfolio companies. Dimensional is a signatory to the UK Stewardship Code and the Japan Stewardship Code, and publicly supports the Task Force on Climate related Financial Disclosures, which is intended to promote consistent climate related financial risk disclosures by companies. Dimensional is also a member of the Council of Institutional Investors (CII), International Corporate Governance Network, and Harvard Institutional Investor Forum (HIIF), which are dedicated to promoting good corporate governance, and the Investment Company Institute (ICI), Global Investment Company Institute, and UK Investment Association (UKIA), which represent the interests of investment companies and investment managers and regularly are involved in commenting on the development of new laws and regulations that impact investment companies and issuers, including those that relate to ESG issues. Dimensional also comments on proposed rules promulgated by the SEC and other regulators regarding corporate governance and other matters to the extent the firm deems it appropriate. DialshifterOur organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by… There are a currently a number of different interpretations of how portfolio alignment with the goals of the Paris Agreement should be measured; for some people it means considering net zero commitments at portfolio companies, whereas for others it means considering whether current emissions are being reduced at the portfolio level in line with a Paris aligned trajectory. The EU Paris Aligned Benchmark (PAB) regulation requires a 50% reduction in emissions intensity versus the starting universe with a 7% year-over-year reduction on an ongoing basis.
Although they are not explicitly measured against this framework, nor do they claim alignment, our sustainability strategies across both equity and fixed income currently achieve a greater reduction in greenhouse gas emissions intensity, relative to their respective benchmarks, than is required under the PAB framework.
SDR Labelling:Not eligible to use label |
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