Sustainability Score

Helping you to help advisers

The past decade has seen enormous growth in the number of sustainable investment products, with many advisers and their clients looking for guidance on how to evaluate these products’ objectives and holdings.

Since the launch of the Lonsec Sustainability Report in 2020, many advisers and their clients have used the reports to help shape their portfolios. The Lonsec Sustainability Report is a stand alone report and along with a Sustainability Score shows investors how your product is contributing to a better world.

Providing greater clarity for investors

As the popularity of ESG investments has grown in recent years, there continues to be a mismatch with what ESG means for fund managers – an investment process – and what it means for advisers and their clients – the ‘goodness’ of a portfolio.

The Lonsec Sustainability Score helps to bridge this gap and provides a way for advisers and their clients to identify investments that align with their values and help shape their portfolios.

Lonsec’s investment ratings reflect a range of factors that contribute to investment outcomes, including an assessment of the fund’s ESG process. The Lonsec Sustainability Score adds to this utilising the UN’s Sustainable Development Goal (SDG) framework to address the opportunities and risks not captured in traditional ESG assessments.

The Lonsec Sustainability Score

Lonsec has partnered with Impact Cubed, a specialist data provider that collates and creates outcome-based impact data for listed companies and securities globally.

The data is used to undertake a detailed analysis of the underlying holdings within a portfolio, netting the positive SDG Contribution against the SDG Detraction, for each investment within a portfolio. The result is a detailed report that shows how a fund rates on each measure, along with an overall Sustainability Score symbolised by between one and five bees, with five being the top-score. The score is a measure of the portfolio ‘goodness’  and is a relative ranking compared to the products peer group.  The score does not constitute a rating in itself and should be used in combination with the Lonsec Rating.