This fund lands in the 10% of strategies with the lowest ESG risk in the Infrastructure Sector Equity category, earning it the highest Morningstar Sustainability Rating of 5 globes. ESG risk measures the degree to which material environmental, social, and governance issues, such as climate change, biodiversity, human capital, as well as bribery and corruption, could affect valuations. ESG risk differs from impact, which is about driving positive environmental and social outcomes for society’s benefit.
Based on its latest prospectus, sustainability or ESG factors are a focus in the investment process of Impax Global Sustainable Infras Fd. Funds with ESG-focused mandates are more likely to deliver positive sustainability outcomes. Impax Global Sustainable Infras Fd has an asset-weighted Carbon Risk Score of 6.6, indicating that its companies have low exposure to carbon-related risks. These are risks associated with the transition to a low-carbon economy such as increased regulation, changing consumer preferences, technological advancements, and stranded assets. The fund's current involvement in fossil fuels rests at 23.1%, which compares favorably with 50.7% for its average category peer. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas. By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with controversial weapons, tobacco, thermal coal, and and small arms. The fund fulfills this goal as its investment exposure to each of these activities is negligible.
The fund has no exposure to high or severe controversies. Controversies are incidents that have a negative impact on stakeholders or the environment, which create some degree of financial risk for the company. Examples of types of controversies include bribery and corruption scandals, workplace discrimination and environmental incidents. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. Such controversies can also damage the reputation of both companies themselves and their shareholders.
The fund's 21.6% involvement in carbon solutions is roughly in line with the 23.3% average involvement of its peers in the Infrastructure category. Carbon solutions include products and services related to renewable energy, energy efficiency, green buildings, green transportation, and so on.
United States