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Square Mile’s 3D investing: new ratings and certifications in Q4  

  • Six funds awarded AAA 3D Impact ratings 
  • Four funds awarded AA 3D Impact ratings 
  • Three 3D Fund Certifications 

3D Investing, Square Mile’s subsidiary dedicated to providing independent evidence that funds meet their Responsible Investment claims, today announces the new Certifications awarded to funds in Q4 2020.  In the first round-up of this kind, 3D Investing confirms that it certified 13 funds, 10 of which qualified for a 3D Impact rating.

3D Fund Certifications are detailed analysis and audit of Responsible Investment funds to determine how strictly they adhere to 3D Investing’s governing philosophy of ‘doing good’, ‘avoiding harm’ and ‘leading change’. In addition, all holdings are scrutinised using objective date and critical analysis.  The results of this research are delivered in a high quality, data rich report.

3D Impact ratings recognise certified funds which meet a minimum threshold for positive social and environmental impact based on a detailed analysis of their composition at an individual security level.  Most holdings must demonstrate a significant positive contribution to UN SDGs via their core products and/or service while negative contributions must be limited and lead change through investee engagement.

Both 3D Fund Certifications and Impact ratings complement Square Mile’s Responsible ratings which are awarded to funds with a responsible outcome or target incorporated into their objectives or mandate.

New AAA 3D Impact ratings 

M&G Climate Solutions  

This fund invests in companies that provide solutions to the challenge of climate change, including clean energy, green technology and the circular economy.  The proprietary impact methodology, stock selection, reporting and historic engagement practice, clearly evidence the high level of impact and give rise to a AAA rating.  (Rating awarded on 21.12.20)

WHEB Sustainability  

WHEB is a specialist fund manager wholly focussed on sustainable investing in global equities.  The FP WHEB Sustainability Fund invests in one of nine environmental and social themes defined as providing a ‘solution to a sustainability challenge’, and driven by the megatrends of resource scarcity, population growth, urbanisation, rising living standards and globalisation.  The team’s understanding and communication of sustainability is exceptional and therefore one of only a small selection of funds to be awarded a AAA rating. (Rating awarded on 21.12.20)

Federated Hermes Impact Opportunities 

The fund seeks to invest in companies that generate sustainable and beneficial impacts which compound over time, leading to rising prosperity across society and financial rewards for investors. The team’s research process is intensive, detailed and reflective. It is driven by thematic research focused on our nine impact themes and bottom-up analysis revolving around investment- and engagement-focused dialogues with corporate boards and executives. This is very much an intentional impact fund, with an excellent standard of reporting.  This leadership is reflected in our top rating. (Rating awarded on 21.12.20)

UBAM Positive Impact Equity 

As its name suggests, this fund is one of a growing number that are invested for positive impact with reference to the UN Sustainable Development Goals. This fund has a European focus and is distinctive for meeting SDG 16 (Peace, Justice and Strong Institutions) by donating a portion of the management fee to charities aligned to this goal.  The fund is committed to reporting on impact, having a very clear alignment with the SDGs and being assessed on their impact intensity.  The quality of the process and portfolio composition make this a AAA fund. (Rating awarded on 14.12.20)

Triodos Pioneer Impact  

Triodos is known as a real pioneer in Responsible Investment, chiefly through its banking operations.  This fund invests in small and medium sized companies that fall into one of four themes – sustainable energy, medical technology, environmental technology and corporate social responsibility pioneers.  We have a very high level of confidence in Triodos and the fund provides exposure to smaller/mid cap global companies in four key areas.  The quality of the research, level of transparency and thematic approach make this a AAA fund. (Rating awarded on 08.12.20)

Regnan Global Equity Impact Solutions 

Regnan was set up to engage investee companies on behalf of institutional investors, and now manages this impact fund as part of J Hambro.  Building on this heritage, every company is actively engaged, whilst every holding is clearly justified in terms of its positive social and environmental impact.  The lack of ethical controversies, exemplary engagement and wholesale focus on impact make this a AAA fund. (Rating awarded on 03.12.20)

New AA 3D Impact ratings 

Triodos Global Equity Impact 

As its name suggests, this fund seeks to make a positive impact through investing in global equities.  It does this, both through identifying companies with positive operational practices and by investing in solutions to the UN SDGs.  Clear intentionality, strong advocacy and a strong process give us confidence in the impact of the manager, and this combined with evidence of impact in stock selection underpin our AA rating. (Rating awarded on 08.12.20)

Triodos Sterling Bond Impact  

Triodos is a European ethical bank with an investment management division that is wholly committed to Responsible Investment.  Unlike the overwhelming majority of Responsible fixed interest funds, this fund has a clear focus on bonds whose proceeds are used to finance solutions to social and environmental solutions.  There is also evidence of positive impact through the operational practices of investee companies, with systematic impact reporting. (Rating awarded on 02.12.20)

Schroder Global Energy Transition 

This fund invests in companies which are either aligned to or are enabling every stage of the energy transition.  This is reflected in a high level of exposure to companies which are positively contributing to the energy transition, with rigorous screening ensuring that negative impacts are minimised.  Furthermore, the fund benefits from Schroders’ extensive Responsible Investment capabilities and demonstrates a high level of engagement. (Rating awarded ion 26.11.20)

Storebrand Global Solutions 

With over 65% of the fund invested in companies which are positively contributing to the UN Sustainable Development Goals, the fund is clearly meeting its aim in this respect.  The managers also undertake extensive engagement at both an individual company and at an industry level.  A comprehensive set of exclusion criteria ensure that the fund’s exposure to ethical controversies is very limited. (Rating awarded on 2.10.20)

New 3D Fund Certifications 

TM Home Investor 

A distinctive approach is adopted by this residential property fund which is marked out by its focus on low-cost properties and by its improvement of the environmental performance of properties.  Regular reporting on a range of environmental metrics gives us confidence in the environmental and social performance of the fund. (Certification awarded on 02.12.20)

7IM Sustainable Balanced 

This is an ‘all-in-one’ fund with a prime focus on asset allocation whilst employing ethical screening and ESG criteria.  The fund both invests directly in stocks which are managed by Sarasin, and in ESG tracker funds.  The fund has indirect exposure to significant ethical issues through the ESG trackers. (Certification awarded on 26.11.20)

Storebrand ESG Plus 

This global equity fund has two primary aims: to replicate the risk and return profile of its benchmark index, and to align with, and enable the transition to a low carbon economy.  Given this objective the fund does not have an impact focus, but employs rigorous exclusion criteria as well as demonstrating a much lower carbon profile than the index. (Certification awarded on 2.10.20)

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