Our ratings now consider ESG factors

We have updated our research process to ensure that Environmental, Social and Governance (ESG) factors are considered as part of your product’s rating.

Recent surveys conducted by Lonsec found that over 90% of rated fund managers agree that the assessment of ESG factors provides an opportunity to improve investment returns or risk management.

To align our ratings process with the views of the investment management industry and the needs of investors, ESG factors will now contribute to your product’s overall rating.

Embedding ESG into our ratings process

We will incorporate ESG as a discrete element in the ratings process for all products, meaning the consistency and robustness of your ESG approach will influence your final rating outcome.
Different managers take a different approach to implementing ESG. Our aim is to assist investors by providing a clear assessment of the extent to which your chosen approach is evident throughout your investment process and supported by a genuine commitment to ESG principles.

Lonsec’s ESG assessment considerations


How transparent is the fund with respect to its voting and engagement activities? How detailed is the fund’s ESG reporting? How clearly is the fund communicating its ESG process to investors?


What evidence is there to support the implementation of the fund’s ESG approach at the research, valuation and portfolio construction level?


How publicly committed is the fund to ESG? How is this commitment reflected in its policy framework and governance procedures?


How is ESG integration supported by the fund’s key investment professionals? To what extent is the stated approach evident in the fund’s investment outcomes?

Important information: Any express or implied rating or advice is limited to general advice, it doesn’t consider any personal needs, goals or objectives.  Before making any decision about financial products, consider whether it is personally appropriate for you in light of your personal circumstances. Obtain and consider the Product Disclosure Statement for each financial product and seek professional personal advice before making any decisions regarding a financial product.