Schroder Global Cities Real Estate Fund
SRI Style:
Sustainability Tilt
SDR Labelling:
Sustainability Focus label
Product:
OEIC
Fund Region:
Global
Fund Asset Type:
Equity
Launch Date:
09/12/2005
Last Amended:
Jan 2024
Dialshifter (
):
Fund Size:
£1364.60m
(as at: 31/12/2022)
Total Screened Themed SRI Assets:
£58000.00m
Total Responsible Ownership Assets:
£737573.00m
Total Assets Under Management:
£737573.00m
ISIN:
GB00B1VPTY75, GB00BDD2DR16, GB00BDD2DQ09, GB00BYX7J192, GB00B0LGTF49, GB00B0LGSD59, GB00B1VPTW51
Contact Us:
Objectives:
Objective
The fund aims to provide income and capital growth in excess of inflation (as measured by UK Consumer Price Index) plus 3% per annum (after fees have been deducted) over a 3- to 5-year period by investing in equities of real estate companies worldwide. This cannot be guaranteed and your capital is at risk.
Investment Policy
The fund is actively managed and invests at least 80% of its assets in equities of real estate companies worldwide which generate the majority of their earnings from real estate investment related activities. The fund may invest in real estate investment trusts.
The fund seeks exposure to companies that invest in cities that the investment manager believes will exhibit continued economic growth, supported by factors such as strong infrastructure and supportive planning regimes.
The fund may also invest in collective investment schemes (including Schroder funds) that invest in equities of real estate companies, warrants and money market instruments, and may hold cash.
The fund may use derivatives with the aim of reducing risk and to manage the fund more efficiently.
Sustainable, Responsible
&/or ESG Overview:
As an SFDR Article 9 fund, Global Cities Fund aims to offer capital growth and income above the FTSE EPRA NAREIT Developed index (NET TR, USD) over 3-5 years by investing in sustainable real estate companies worldwide. Aligned with the Impact Management Project, the fund strives to 'Contribute to solutions' and 'Act to avoid harm', focusing on the UN's Sustainable Development Goal (SDG) 11: Sustainable Cities and Communities. ESG integration is vital in the investment process for portfolio inclusion and investment amount, with each company aligned to one or more UN SDGs.
ESG plays a central role in research and the investment process which screens out ESG laggards. Active Stewardship is an important mechanism for supporting portfolio companies in achieving ESG targets and positively impacting society, with numerous engagements addressing various issues throughout the year.
Primary fund last amended:
Jan 2024
Information directly from fund manager.
Fund Filters
Sustainability - General
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Find funds 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.
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Find funds that specifically aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Find funds that publicly report their performance against specifically named sustainability objectives (in addition to reporting their financial performance)
Fund has a strategy that focuses on sustainability issues in the property sector - they may eg use GRESB / BREEAM scores to inform investment decisions.
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 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.
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail.
Nature & Biodiversity
A significant focus on investments that aim to protect, improve and, or restore natural habitat.
Climate Change & Energy
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Funds that avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary. See fund information for further information.
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Fund funds that have an energy efficiency theme - typically meaning that a fund manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail.
The fund manager excludes companies with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
This fund has a strategy that aims ensure its holdings will gradually reduce their greenhouse gas emissions in line with targets set at COP21 in Paris. The ultimate aim is to achieve ‘net zero emissions by 2050’ and a ‘maximum global temperature increase of +1.5 to +2 degrees above preindustrial levels’. Strategies and opinions vary. Read fund information.
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/
Social / Employment
All mining companies excluded
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 that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information.
Human Rights
Find funds that have policies relating to human rights issues. Funds of this kind typically require companies to demonstrate higher standards, although some fund managers work to encourage improvements. Investee companies are often judged against internationally agreed norms or standards. Strategies vary. See fund information for further detail.
Find funds that have policies in place to ensure they do not invest in companies that employ children.
The fund has a policy which excludes assets with involvement in Modern Slavery
Banking & Financials
Will not invest in any banks.
Fund excludes financial services companies with widely criticised, aggressive lending practices where interest rates are typically very high, includes ‘doorstep lending’)
Governance & Management
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Find funds that have policies explaining how managers will respond to assets / companies that do not comply with relevant anti-bribery and anti-corruption standards or laws. Strategies vary; options include stewardship/ engagement and divestment - or a combination. 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.
Environmental, social and governance issues are part of this fund’s reporting of their ‘value’ to clients. AoV reporting is a statutory requirement. Including ESG factors in its calculation is not.
Asset Size
Find a fund that invests in a combination of small, medium and larger (potentially multinational)companies.
Impact Methodologies
Funds that aim to help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Funds that aim to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Funds that aim to deliver positive impacts and measure those impacts may be referred to as 'impact funds' - although impact measurement is not restricted to impact funds. Strategies vary. See fund information.
Fund aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets
How The Fund Works
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
Find funds that make stock selection (and ongoing fund management) decisions based on ESG data or company ratings (normally supplied by third parties) rather than focusing on what individual companies do, how they operate or their plans for the future
Aims to avoid companies that do significant harm. This originates from the EU’s sustainable finance ‘DNSH’ (do no significant harm) work, which is not necessarily used by UK investors.
Find funds that have 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
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.
Finds funds designed to meet the needs of individual investors with an interest in ‘Impact investment funds’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Find funds that are available via a tax efficient ISA product wrapper.
Only applicable for DFM’s & portfolio providers. Find service providers who offer multiple SRI / ESG portfolio options
Only applicable for DFM’s & portfolio providers. Find service providers who offer bespoke ('personalised') SRI / ESG portfolio options
Labels & Accreditations
Finds funds classified under Article 9 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 9 of the SFDR applies to financial products that have sustainable investment 'objectives' - including emissions reduction objectives. (These may currently be referred to as 'impact' funds or aiming to deliver clear, specific positive outcomes.) These rules do not currently apply in the UK so fund managers may leave this field blank.
Find funds that have chosen to adopt one of the Financial Conduct Authority (FCA) SDR labels. Please note: there are a range of reasons why potentially relevant funds may not use an SDR label eg. adopting a label may be work in progress, the manager may not yet be allowed to do so because of the product type, a manager may feel their fund is insufficiently aligned to SDR requirements. Read fund literature and / or our blogs for further information.
Transparency
Find fund management companies that have supplied Dialshifter information. See Dialshifter tab within record for more information.
Sustainable, Responsible &/or ESG Policy:
One of the principal aims of the fund is to allocate capital in order to facilitate the United Nations’ Sustainable Development Goal (SDG) 11, Sustainable Cities and Communities. In order to achieve this aim, ESG is integrated throughout the investment process and is a key factor in determining both portfolio inclusion and the quantum of investment.
Global Cities is a data-led investment process with ESG at its core. This process filters companies in two stages:
Stage 1 analyses the location of a company’s assets and applies a rank based on four bespoke ‘Impact Scores’:
- Environmental Impact
- Transport Score
- Innovation Impact
- Economic Impact.
Specifically, ESG is considered in the environmental and transport score here – further information on these scores are detailed below. The city score determined by each impact score creates a list of companies eligible for stage 2. This list is called the Long-Term Index (LTI).
Environmental Impact score (EIS)
Each asset is assessed as to how environmentally sustainable its location is and scored according to physical, wellbeing and policy. The database is bespoke to the Global Cities team and draws on numerous data sources to quantify urban locations. For example, data from national weather services, NASA and ESA, research institutes and universities all help build a geo-spatial map of cities from an environmental perspective.
The picture below (removed as the response requires text only) from the EIS shows Air Quality data from NASA which can be geo-framed to focus on particular cities.
The Environmental score is applied to a company’s assets. A company owning assets in Stockholm will receive a better score than a company that has assets in Los Angeles (LA). Stockholm ranks higher than LA, as quantified by the EIS.
A quantified company’s EIS score results in a cross-comparison between companies as to who owns assets in the most environmentally resilient locations.
Each city is given an environmental score out of 10 (with 10 being considered the best possible score). This means, mechanically, the assets of every company are screened on the basis of ‘Environmental Impact’ in the first part of the investment process.
Transport Impact score (TIS)
Transport has two important functions that are interrelated. First, mass transit provides access to more employers; second this acts as a social leveller in poorer neighbourhoods.
Harvard University released a two-part study in 2018 looking at the impact of neighbourhoods on life chances. An area of focus was transport. Transport provides access to a wider pool of job opportunities, making it an important social leveller.
The transport score analyses data of five transport modes: sea, road, train, bus and air. A company with assets in a city with good transport will received a better score than one that does not.
Stage 2 considers the ESG and Valuation metrics of a company using Schroders’ proprietary tool CONTEXT™. The metrics provided by CONTEXT™ determines a company’s investible range.
Stage 2 focuses in two key areas:
- Establishing a maximum investment for each company
- Valuing the company.
The investable range for each company is determined by ESG analysis, utilising Schroders’ bespoke ESG tool CONTEXT™.
The valuation for each company is determined by local analysts using proprietary data sets combined with ‘traditional’ research such as, meetings with management teams and inspecting assets.
ESG Score: Integrated
The objective of the ESG score is to limit the size of exposure to any one company by identifying the key areas that could lead to any potential capital loss. This is the first part of position sizing.
Once included in the LTI any company has a theoretical maximum investment of 6%.
Our ESG assessment uses CONTEXT™ as the primary tool for comparing companies. Analyst research is combined with third party data from sources such as GRESB, BoardEx and Refinitiv Eikon, leading to differences in the calculated scores for each company.
Companies with bottom quartile CONTEXT™ scores are excluded from investment. The CONTEXT™ scores for the remaining stocks are used to size portfolio positions.
CONTEXT™ analyses a company’s sustainability through the eyes of key stakeholders. CONTEXT™ aims to determine the impact on society for the profit generated by a company.
Process:
Global Cities is a data-led investment process with ESG at its core. This process screens companies in two stages:
- Takes the location of a company’s assets and applies a rank based on four bespoke ‘Impact Scores’ (environmental, transport, innovation and economic). This creates a list of companies eligible for stage 2. This list is called the Long Term Index (LTI).
- From the LTI, ESG analysis using the bespoke ‘CONTEXT™’ system for the maximum capital allocation and valuation for the position sizing within that range. The maximum investment is 8% in any company in the LTI. This quantum is then reduced by varying amounts depending on the ESG characteristics of the company. Companies with bottom quartile CONTEXT™ scores are excluded from investment.
Dialshifter
This fund is helping to ‘shift the dial from brown to green’ by…
Schroders Global Cities fund is helping shift the dial from brown to green by investing in sustainable real estate, focusing on innovative and environmentally resilient cities and infrastructure. With strong governance practices, a commitment to social objectives, and rigorous exclusion criteria, the fund is driving positive change while offering a future-focused investment opportunity.
Fund Holdings
Disclaimer
Risk Considerations – Schroder Global Cities Real Estate
The following risks may affect fund performance:
- Capital risk / distribution policy: As the fund intends to pay dividends regardless of its performance, a dividend may represent a return of part of the amount you invested.
- 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.
- Currency risk: The fund may lose value as a result of movements in foreign exchange rates.
- Currency risk / hedged share class: The hedging of the share class may not be fully effective and residual currency exposure may remain. The cost associated with hedging may impact performance and potential gains may be more limited than for unhedged share classes.
- Emerging markets & frontier risk: Emerging markets, and especially frontier markets, generally carry greater political, legal, counterparty, operational and liquidity risk than developed markets.
- Higher volatility risk: The price of this fund may be volatile as it may take higher risks in search of higher rewards.
- 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.
- Market risk: The value of investments can go up and down and an investor may not get back the amount initially invested.
- 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.
- Real estate and property risk: Real estate investments are subject to a variety of risk conditions such as economic conditions, changes in laws (e.g. environmental and zoning) and other influences on the market.
- Sustainability risk: The fund has the objective of sustainable investment. 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.
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
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|---|---|---|---|---|---|---|---|---|
Schroder Global Cities Real Estate Fund |
Sustainability Tilt | Sustainability Focus label | OEIC | Global | Equity | 09/12/2005 | Jan 2024 | |
ObjectivesObjective The fund aims to provide income and capital growth in excess of inflation (as measured by UK Consumer Price Index) plus 3% per annum (after fees have been deducted) over a 3- to 5-year period by investing in equities of real estate companies worldwide. This cannot be guaranteed and your capital is at risk.
Investment Policy The fund is actively managed and invests at least 80% of its assets in equities of real estate companies worldwide which generate the majority of their earnings from real estate investment related activities. The fund may invest in real estate investment trusts. The fund seeks exposure to companies that invest in cities that the investment manager believes will exhibit continued economic growth, supported by factors such as strong infrastructure and supportive planning regimes. The fund may also invest in collective investment schemes (including Schroder funds) that invest in equities of real estate companies, warrants and money market instruments, and may hold cash. The fund may use derivatives with the aim of reducing risk and to manage the fund more efficiently.
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Fund Size: £1364.60m (as at: 31/12/2022) Total Screened Themed SRI Assets: £58000.00m (as at: 31/12/2022) Total Responsible Ownership Assets: £737573.00m (as at: 31/12/2022) Total Assets Under Management: £737573.00m (as at: 31/12/2022) ISIN: GB00B1VPTY75, GB00BDD2DR16, GB00BDD2DQ09, GB00BYX7J192, GB00B0LGTF49, GB00B0LGSD59, GB00B1VPTW51 Contact Us: sami.arouche@schroders.com |
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Sustainable, Responsible &/or ESG OverviewAs an SFDR Article 9 fund, Global Cities Fund aims to offer capital growth and income above the FTSE EPRA NAREIT Developed index (NET TR, USD) over 3-5 years by investing in sustainable real estate companies worldwide. Aligned with the Impact Management Project, the fund strives to 'Contribute to solutions' and 'Act to avoid harm', focusing on the UN's Sustainable Development Goal (SDG) 11: Sustainable Cities and Communities. ESG integration is vital in the investment process for portfolio inclusion and investment amount, with each company aligned to one or more UN SDGs. ESG plays a central role in research and the investment process which screens out ESG laggards. Active Stewardship is an important mechanism for supporting portfolio companies in achieving ESG targets and positively impacting society, with numerous engagements addressing various issues throughout the year. |
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Primary fund last amended: Jan 2024 |
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Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Sustainability policy
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
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.
Encourage more sustainable practices through stewardship
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
UN Global Compact linked exclusion policy
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
UN Sustainable Development Goals (SDG) focus
Find funds that specifically aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Report against sustainability objectives
Find funds that publicly report their performance against specifically named sustainability objectives (in addition to reporting their financial performance)
Green / Sustainable property strategy
Fund has a strategy that focuses on sustainability issues in the property sector - they may eg use GRESB / BREEAM scores to inform investment decisions. 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.
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.
Favours cleaner, greener companies
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail. Nature & Biodiversity
Nature / biodiversity based solutions theme
A significant focus on investments that aim to protect, improve and, or restore natural habitat. Climate Change & Energy
Coal, oil & / or gas majors excluded
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Fracking and tar sands excluded
Funds that avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary. See fund information for further information.
Fossil fuel reserves exclusion
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
Encourage transition to low carbon through stewardship activity
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Energy efficiency theme
Fund funds that have an energy efficiency theme - typically meaning that a fund manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Nuclear exclusion policy
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail.
Fossil fuel exploration exclusion - direct involvement
The fund manager excludes companies with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
Paris aligned fund strategy
This fund has a strategy that aims ensure its holdings will gradually reduce their greenhouse gas emissions in line with targets set at COP21 in Paris. The ultimate aim is to achieve ‘net zero emissions by 2050’ and a ‘maximum global temperature increase of +1.5 to +2 degrees above preindustrial levels’. Strategies and opinions vary. Read fund information.
TCFD reporting requirement (Becoming IFRS)
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/ Social / Employment
Mining exclusion
All mining companies excluded 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.
Armaments manufacturers avoided
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Civilian firearms production exclusion
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Alcohol production excluded
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Gambling avoidance policy
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Pornography avoidance policy
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information. Human Rights
Human rights policy
Find funds that have policies relating to human rights issues. Funds of this kind typically require companies to demonstrate higher standards, although some fund managers work to encourage improvements. Investee companies are often judged against internationally agreed norms or standards. Strategies vary. See fund information for further detail.
Child labour exclusion
Find funds that have policies in place to ensure they do not invest in companies that employ children.
Modern slavery exclusion policy
The fund has a policy which excludes assets with involvement in Modern Slavery Banking & Financials
Banking exclusion
Will not invest in any banks.
Predatory lending exclusion
Fund excludes financial services companies with widely criticised, aggressive lending practices where interest rates are typically very high, includes ‘doorstep lending’) Governance & Management
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
Anti-bribery and corruption policy
Find funds that have policies explaining how managers will respond to assets / companies that do not comply with relevant anti-bribery and anti-corruption standards or laws. Strategies vary; options include stewardship/ engagement and divestment - or a combination. 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.
ESG factors included in Assessment of Value (AoV) report
Environmental, social and governance issues are part of this fund’s reporting of their ‘value’ to clients. AoV reporting is a statutory requirement. Including ESG factors in its calculation is not. 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. Impact Methodologies
Aims to generate positive impacts (or 'outcomes')
Funds that aim to help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Measures positive impacts
Funds that aim to measure the positive real world environmental and / or social benefits that are associated with their investment strategy. Funds that aim to deliver positive impacts and measure those impacts may be referred to as 'impact funds' - although impact measurement is not restricted to impact funds. Strategies vary. See fund information.
Aim to deliver positive impacts through engagement
Fund aims to deliver positive environmental and or social impacts (real world benefits) through its engagement with investee assets How The Fund Works
Positive selection bias
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Negative selection bias
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
Data led strategy
Find funds that make stock selection (and ongoing fund management) decisions based on ESG data or company ratings (normally supplied by third parties) rather than focusing on what individual companies do, how they operate or their plans for the future
Significant harm exclusion
Aims to avoid companies that do significant harm. This originates from the EU’s sustainable finance ‘DNSH’ (do no significant harm) work, which is not necessarily used by UK investors.
Assets mapped to SDGs
Find funds that have 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Focus on ESG risk mitigation
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
SRI / ESG / Ethical policies explained on website
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies). 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.
Intended for clients who want to have a positive impact
Finds funds designed to meet the needs of individual investors with an interest in ‘Impact investment funds’ which help or support the delivery of positive social or environmental impacts (or societal/real world outcomes) by investing in companies they regard as beneficial to people and / or the planet. Strategies vary. See fund literature for further information.
Available via an ISA (OEIC only)
Find funds that are available via a tax efficient ISA product wrapper.
Multiple SRI / ESG portfolio options available (DFMs)
Only applicable for DFM’s & portfolio providers. Find service providers who offer multiple SRI / ESG portfolio options
Bespoke SRI / ESG portfolios available (DFMs)
Only applicable for DFM’s & portfolio providers. Find service providers who offer bespoke ('personalised') SRI / ESG portfolio options Labels & Accreditations
SFDR Article 9 fund / product (EU)
Finds funds classified under Article 9 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 9 of the SFDR applies to financial products that have sustainable investment 'objectives' - including emissions reduction objectives. (These may currently be referred to as 'impact' funds or aiming to deliver clear, specific positive outcomes.) These rules do not currently apply in the UK so fund managers may leave this field blank.
SDR Labelled
Find funds that have chosen to adopt one of the Financial Conduct Authority (FCA) SDR labels. Please note: there are a range of reasons why potentially relevant funds may not use an SDR label eg. adopting a label may be work in progress, the manager may not yet be allowed to do so because of the product type, a manager may feel their fund is insufficiently aligned to SDR requirements. Read fund literature and / or our blogs for further information. Transparency
Dialshifter statement
Find fund management companies that have supplied Dialshifter information. See Dialshifter tab within record for more information. Sustainable, Responsible &/or ESG Policy:One of the principal aims of the fund is to allocate capital in order to facilitate the United Nations’ Sustainable Development Goal (SDG) 11, Sustainable Cities and Communities. In order to achieve this aim, ESG is integrated throughout the investment process and is a key factor in determining both portfolio inclusion and the quantum of investment. Global Cities is a data-led investment process with ESG at its core. This process filters companies in two stages:
Stage 1 analyses the location of a company’s assets and applies a rank based on four bespoke ‘Impact Scores’:
Specifically, ESG is considered in the environmental and transport score here – further information on these scores are detailed below. The city score determined by each impact score creates a list of companies eligible for stage 2. This list is called the Long-Term Index (LTI).
Environmental Impact score (EIS) Each asset is assessed as to how environmentally sustainable its location is and scored according to physical, wellbeing and policy. The database is bespoke to the Global Cities team and draws on numerous data sources to quantify urban locations. For example, data from national weather services, NASA and ESA, research institutes and universities all help build a geo-spatial map of cities from an environmental perspective. The picture below (removed as the response requires text only) from the EIS shows Air Quality data from NASA which can be geo-framed to focus on particular cities. The Environmental score is applied to a company’s assets. A company owning assets in Stockholm will receive a better score than a company that has assets in Los Angeles (LA). Stockholm ranks higher than LA, as quantified by the EIS. A quantified company’s EIS score results in a cross-comparison between companies as to who owns assets in the most environmentally resilient locations. Each city is given an environmental score out of 10 (with 10 being considered the best possible score). This means, mechanically, the assets of every company are screened on the basis of ‘Environmental Impact’ in the first part of the investment process.
Transport Impact score (TIS) Transport has two important functions that are interrelated. First, mass transit provides access to more employers; second this acts as a social leveller in poorer neighbourhoods. Harvard University released a two-part study in 2018 looking at the impact of neighbourhoods on life chances. An area of focus was transport. Transport provides access to a wider pool of job opportunities, making it an important social leveller. The transport score analyses data of five transport modes: sea, road, train, bus and air. A company with assets in a city with good transport will received a better score than one that does not.
Stage 2 considers the ESG and Valuation metrics of a company using Schroders’ proprietary tool CONTEXT™. The metrics provided by CONTEXT™ determines a company’s investible range. Stage 2 focuses in two key areas:
The investable range for each company is determined by ESG analysis, utilising Schroders’ bespoke ESG tool CONTEXT™. The valuation for each company is determined by local analysts using proprietary data sets combined with ‘traditional’ research such as, meetings with management teams and inspecting assets.
ESG Score: Integrated The objective of the ESG score is to limit the size of exposure to any one company by identifying the key areas that could lead to any potential capital loss. This is the first part of position sizing. Once included in the LTI any company has a theoretical maximum investment of 6%. Our ESG assessment uses CONTEXT™ as the primary tool for comparing companies. Analyst research is combined with third party data from sources such as GRESB, BoardEx and Refinitiv Eikon, leading to differences in the calculated scores for each company. Companies with bottom quartile CONTEXT™ scores are excluded from investment. The CONTEXT™ scores for the remaining stocks are used to size portfolio positions. CONTEXT™ analyses a company’s sustainability through the eyes of key stakeholders. CONTEXT™ aims to determine the impact on society for the profit generated by a company.
Process:Global Cities is a data-led investment process with ESG at its core. This process screens companies in two stages:
DialshifterThis fund is helping to ‘shift the dial from brown to green’ by… Schroders Global Cities fund is helping shift the dial from brown to green by investing in sustainable real estate, focusing on innovative and environmentally resilient cities and infrastructure. With strong governance practices, a commitment to social objectives, and rigorous exclusion criteria, the fund is driving positive change while offering a future-focused investment opportunity. Fund HoldingsDisclaimerRisk Considerations – Schroder Global Cities Real Estate
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