To help advisers and their clients navigate the often confusing sustainability landscape, Lonsec introduced its Sustainability Scores to give users an understanding of how well an investment product—whether an exchange trade fund (ETF), managed account, or traditional managed fund—lives up to its sustainable credo.
Funds covered by Lonsec are issued with a Sustainability Score, which reflects the underlying investments of individual products and their compatibility with the United Nation’s 17 Sustainable Development Goals (SDGs). Ultimately, the purpose of the Sustainability Scores and the underlying research is to help investors answer the fundamental question: ‘What am I really invested in?’
If you can’t answer that, then you don’t know whether your portfolio is truly delivering sustainable outcomes.
Under Lonsec’s sustainable research approach, a Sustainability Report is issued for each fund that undergoes assessment. This is a two-page document detailing the relative success of the fund in supporting the SDGs, together with any exposure to 10 controversial industries. The Sustainability Score reflects the net impact of these measures, which is peer ranked and results in a score of between one and five bees.