- Asset managers in Sweden, The Netherlands, France and Germany offer investors the most environmentally friendly funds investing in emerging markets;
- US industry lags, along with Japan, Denmark and Canada.
- Robeco, Amundi, SEB and Comgest have the highest share of emerging markets funds outperforming competitors on environmental issues;
- New global ‘best in class’ comparison of emerging markets funds is based on performance across climate change, deforestation and water security issues by non-profit Climetrics.
May 31, 2021 (Berlin): Asset managers in Sweden, The Netherlands, France and Germany offer the highest share of environmentally friendly fund options for emerging markets investors, according to a new comparison of 732 funds released today by Climetrics.
The new analysis compares actively managed funds investing in emerging markets equity and/or corporate bonds on their environmental performance. It finds that 74% of Swedish funds sold are among the best quartile of emerging markets funds rated by Climetrics worldwide.
Dutch asset managers (62% of their emerging market funds), French (47%) and German (46%) managers follow next in the ranking.
American asset managers have just 14% of emerging markets funds in the top quartile, while Japanese managers perform worst with only 2 of the 17 funds rated by Climetrics positioned in the top.
The analysis compared a total of 732 emerging markets funds in 10 countries worldwide.
Alongside the comparison across countries, today’s analysis also reveals the asset managers having the highest share of top-ranked emerging markets funds. Robeco is positioned first the list, followed by Europe’s largest manager Amundi, Sweden’s SEB and French manager Comgest. Only managers with a minimum of 5 emerging markets funds were analyzed.
The addition of a new best in class ranking means that Climetrics now publishes both free-to-search best-in-universe leaf ratings and best-in-class peer group rankings for 20,000 global funds based on climate change, forests and water security data.
Comparing funds exclusively against their peer group competitors makes it easier for investors to compare and select funds from investment regions like emerging markets, where the overall transparency and performance of companies on environmental topics is less advanced than in Europe.
No active emerging market fund scores higher than a 4-leaf rating on Climetrics on a best-in-universe basis, whereas as many as 18% of European actively managed equity and bond funds have the best 5-leaf Climetrics rating.
As of today, investors can use the peer group ranking to find the most environmentally friendly funds across investment regions and sectors on CDP’s website. All Climetrics leaf ratings and peer group rankings are updated monthly.
Climetrics ratings for funds measure the performance of a fund’s holdings, its asset manager’s governance of climate issues, and its investment policy, to help investors find funds well-positioned in the transition to a low carbon, water-resilient and deforestation-free economy.
The rating is most affected by a fund’s holdings, so is influenced by the active investment decisions taken by fund managers.
The rating emphasizes transition finance. In industries where environmental risks are more significant but where companies have better environmental performance ambition, funds score more highly. This includes, for example, companies from high impact sectors that have a science-based target to reduce emissions in line with 1.5°C.
Among 20,000 funds on Climetrics, around 85% are actively managed and 15% are ETFs.
Nico Fettes, Head of Product Development at CDP, said:
“With the right information available, retail investors can play a significant role in the global effort to limit global warming to 1.5 °C, halt deforestation and secure water resources. Investors want diversified portfolios and should be able to easily identify which funds are the best according to environmental criteria, in a direct comparison compared to other products with a similar investment universe. This analysis shows that there are significant differences between the environmental performance of funds depending on where the asset manager is located, reflecting the different stages of their home markets when it comes to sustainable finance. Investors should use Climetrics’ new peer group comparisons to ensure their money invests in companies that will lead the transition to a net-zero emissions, sustainable economy.”
Climetrics rates nearly 20,000 funds every month representing €16.8 trillion, around 32% of the total assets of the global investment fund industry. The database is free-to-search at http://www.cdp.net/en/investor/climetrics
Notes to editor
For more information or interviews with CDP, please contact:
Joshua Snodin, CDP +4917645910909 | e : [email protected]
CDP is a global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with over 590 investors with $110 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Over 10,000 organizations around the world disclosed data through CDP in 2020, including more than 9,600 companies worth over 50% of global market capitalization, and over 940 cities, states and regions, representing a combined population of over 2.6 billion. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative. Visit cdp.net or follow us @CDP and on LinkedIn to find out more.
Climetrics is the first rating that provides a holistic assessment of a fund’s climate-related risks and opportunities. It independently rates thousands of actively managed funds and ETFs and its ratings are free-to-search, providing investors with transparency on climate change-related risks when comparing funds. Climetrics looks inside each fund, measuring its portfolio holdings' exposure to environmental risks and opportunities, as well as the fund’s investment policy and the asset manager’s public action on climate change. It was developed by two recognized climate specialists, non-profit CDP and ISS-ESG. The project was catalyzed and funded by Climate-KIC, the EU's main climate innovation initiative. Climetrics rates nearly 20,000 funds every month representing €16.8 trillion, around 32% of the total assets of the global investment fund industry.
The database is free-to-search at www.cdp.net/en/investor/climetrics