Schroders Launches SustainEx: A Cutting Edge Approach to ESG
NEW YORK–(BUSINESS WIRE)–Today, global asset manager Schroders has announced the launch of SustainEx,
a proprietary investment tool designed to quantify social
and environmental impacts across individual companies, industries and
geographies. It is the first framework that attempts to translate social
and environmental impacts into financial costs or benefits. Through this
platform, investment teams will now have access to a systematic and
quantitative measure of sustainability risk that can be applied across
investment strategies.
Andrew Howard, Schroders’ Head of Sustainable Research, commented:
“Companies and countries are coming under growing pressure from
regulators and society to consider their impacts on challenges like
climate change, pollution and obesity. As those social tensions become
more acute, it’s becoming more likely that these social and
environmental externalities will result in tangible financial costs.
“We believe it is therefore more important than ever that investors
consider the social impacts of companies and portfolios, rather than
relying purely on financial measure.
“How companies make money is as important as how much they make
today. We developed SustainEx to provide a quantitative view of the
threats and opportunities companies and markets face to help our
analysts, fund managers and clients navigate an increasingly complex
world.”
SustainEx combines economic logic with sustainability expertise,
industry knowledge, company data and academic research to deliver a
transparent, impartial and robust measure of corporate impact across
around 9,000 global companies. It analyzes over 47 measures of social
and environmental impact, examines over 400 academic and industry
studies and reviews over 70 available company-specific data points, as
well as leverages unconventional data from relevant public sources. The
SustainEx model then calculates an annual cost or benefit created per
$100 of revenue the company produces.
In total, the analysis found that the earnings listed companies generate
for shareholders currently total $4.1 trillion, which would fall by 55%
to $1.9 trillion if those social and environmental impacts crystallized
as financial costs. One third of companies would become loss-making. The
risk to profits and competitive positions is clear.
Schroders investment professionals across asset classes are taking the
results of the model into account, in addition to Schroders’ existing
toolkit of Environmental, Social and Corporate Governance analyses and
frameworks. For example, SustainEx is a core component of Schroders’
recently-launched Sustainable
Multi-Factor Equity (SMFE) strategy, with its analysis helping
investors navigate the growing impacts from social and environmental
change. Schroders’ SMFE is a systematic equity strategy with a fully
integrated approach to sustainable investing. It is designed to provide
investors with ongoing access to the best thinking in two increasingly
important fields of investment: factor investing and sustainability. The
strategy has raised $1 billion globally since launching in September
2018.
Charles Prideaux, Global Head of Product and Solutions, Schroders,
commented:
“Our clients are increasingly asking us how we are factoring
sustainability into our investment approach. Schroders’ SustainEx model
is a ground-breaking tool that ensures these factors are fully
integrated into the investment approach of the SMFE fund to help deliver
better long-term sustainable returns for our clients.”
SustainEx is part of the toolkit of Environmental, Social and Corporate
Governance analysis and frameworks that Schroders is developing. The
toolkit includes ten proprietary investment tools include Schroders’ Climate
Progress Dashboard, Carbon
Value at Risk.
* Schroders analyzed 9,000 companies and ranked the world’s main stock
markets according to their overall impact on society, putting a dollar
value to their social and environmental impacts. Schroders has
aggregated this analysis according to their stock-market domicile or
industry group.
Note to Editors
Schroders plc
As a global investment manager, we help institutions, intermediaries and
individuals meet their goals, fulfil their ambitions, and prepare for
the future. But as the world changes, so do our clients’ needs. That’s
why we have a long history of adapting to suit the times and keeping our
focus on what matters most to our clients.
Doing this takes experience and expertise. We bring together people and
data to spot the trends that will shape the future. This provides a
unique perspective which allows us to always invest with conviction. We
are responsible for $536.7 billion (€469.5 billion/£421.4 billion)* of
assets for our clients who trust us to deliver sustainable returns. We
remain determined to build future prosperity for them, and for all of
society. Today, we have 5,000 people across six continents who focus on
doing just this.
We are a global business that’s managed locally. This allows us to
always keep our clients’ needs at the heart of everything we do. For
over 200 years and more than seven generations we’ve grown and developed
our expertise in tandem with our clients’ needs and interests.
Further information about Schroders can be found at www.schroders.com/us.
Schroder Investment Management North America Inc. (“SIMNA”) is an
indirect wholly owned subsidiary of Schroders plc, a UK public company
with shares listed on the London Stock Exchange, and is an SEC
registered investment adviser providing asset management products and
services to clients in the US and Canada. Schroder Fund Advisors LLC
(“SFA”) is a wholly-owned subsidiary of SIMNA Inc. and is registered as
a limited purpose broker-dealer with FINRA and markets certain
investment vehicles for which SIMNA Inc. is an investment adviser. The
Schroder mutual funds (the “Funds”) are distributed by SEI Investments
Distribution Co (“SIDCO”), a member of FINRA.
SFA previously served as the distributor of the Funds. Although SFA has
been replaced by SIDCO as the distributor of the Funds, SFA continues to
be involved in the distribution of shares of the Funds through an
agreement with SIDCO, and SFA, SIMNA and their affiliates continue to
provide shareholder services to the Funds. SIDCO is not an affiliate of
Schroders plc.
*as of December 31, 2018
Contacts
For further information, please contact:
Catherine Johnson
of Prosek at 347-486-6335, cjohnson@prosek.com
Jennifer
Manser of Schroders at 212-632-2947, jennifer.manser@schroders.com