Lazard Global Thematic Focus Fund
SRI Style:
Sustainability Tilt
SDR Labelling:
Not eligible to use label
Product:
SICAV/Offshore
Fund Region:
Global
Fund Asset Type:
Equity
Launch Date:
19/12/2019
Last Amended:
Aug 2022
Dialshifter (
):
Fund Size:
£517.12m
(as at: 31/12/2024)
ISIN:
IE00BKX9F080, IE000BHPX359, IE000CPX1LX6, IE0000XZS910, IE000P2SXPB6
Sustainable, Responsible
&/or ESG Overview:
No response when requested update from fund manager (March 2024)
Our strategy is “thematic”, focused on long-term structural change. We aim to identify key shifts in business models, industries, economies, and markets, and from these insights create multiple themes.
Sustainability analysis offers an opportunity to enhance return and mitigate risk.
From a return perspective structural shifts in society and policy may provide potential investment tailwind. As thematic investors we are able to capture this opportunity set through our theme design.
From a risk perspective holdings are evaluated using our proprietary Sustainability framework, this scoring threshold provides a comprehensive and intellectually robust approach to framing and implementation of complex ESG and sustainability risks.
Our UCITS vehicle also implements a series of exclusions based on UNGC failure, tobacco, controversial weapons and thermal coal.
We promote solutions to long-term challenges through our theme design and a higher standard of environmental and social characteristics through our scoring system.
Primary fund last amended:
Aug 2022
Information directly from fund manager.
Fund Filters
Sustainability - General
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Find funds which substantially focus on sustainability issues
Find funds where there is a significant emphasis on (environmental and social) sustainability. Funds with a 'sustainability theme' typically place more emphasis on the area than funds with a 'sustainability policy' - meaning that it is more likely to drive investment selection. Strategies vary. See fund information for further detail.
Find funds that have documented policies or thematic investment approaches relating to investment in more sustainable, greener transport methods. These will typically set out a preference for companies that run, enable or support more sustainable methods of transport. See fund information for further detail.
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Environmental - General
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
Funds that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change. Funds vary - some funds may be 'underweight' in this area which means they may have some investment in highly carbon intensive areas. Funds of this kind may choose companies they consider to be 'best in sector' and encourage ever higher standards. Strategies vary. See fund information for further details.
Funds that have written policies explaining the approach they take when companies damage the environment or are significant polluters. Funds of this kind may work with companies to encourage higher standards, or exclude companies - sometimes dependent on the situation. Strategies vary. See fund information for further detail.
Find funds that have a policy or theme that relates to managing natural resources more efficiently. Funds with this policy will be likely to favour companies that make (or enable the) more efficient use of resources - and either avoid or encourage change amongst companies with lower standards. Strategies vary. See fund information for further detail.
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail.
Climate Change & Energy
Find funds where investment in clean / renewable energy companies an other assets is central to their investment selection strategy. The proportion of the fund that is directly or indirectly invested in renewable energy varies between funds and over time. See fund information for further details.
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Fund funds that have an energy efficiency theme - typically meaning that a fund manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Funds that hold companies in the clean energy and renewable energy sectors (at the time research was supplied). Fund strategies vary, in particular the proportion of investment in these areas may vary significantly. Check fund literature for details.
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail.
Social / Employment
Find funds that have policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). Funds with social policies typically avoid companies with low standards or work to encourage higher standards. See fund information for detail.
Ethical Values Led Exclusions
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Human Rights
Find funds that have policies relating to human rights issues. Funds of this kind typically require companies to demonstrate higher standards, although some fund managers work to encourage improvements. Investee companies are often judged against internationally agreed norms or standards. Strategies vary. See fund information for further detail.
Governance & Management
Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices. Strategies vary. See fund literature for further information.
Find funds that aim to avoid investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards. See fund literature for further information.
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity
Fund Governance
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature.
Asset Size
Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Find a fund that invests in a combination of small, medium and larger (potentially multinational)companies.
Impact Methodologies
Find funds that direct investment towards companies where a major part of their business is about solving environmental challenges. e.g. companies helping to address climate change.
Find funds that invest in companies where a major part of their business is specifically aimed at helping to address social challenges. e.g. companies helping to address poverty.
Find funds that specifically set out to invest in companies that are regarded as 'disrupting' existing business practices - typically through the development of innovative (sustainability aware) products and/or practices.
How The Fund Works
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
Find funds with few exclusions - typically for example exclude tobacco or companies that breach commonly adopted standards or norms such as the UN Global Compact.
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Find funds that have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
Find funds that consider both the 'positive' and 'negative' aspects of company behaviour and make balanced, considered decisions as part of their investment approach. May apply to a range of different issues and policy areas.
Find funds that use internationally agreed standards, conventions and 'norms' to help direct where the fund can and cannot invest (e.g. the UN Global Compact, UN Sustainable Development Goals). Read fund literature for further information.
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
Intended Clients & Product Options
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Find funds that are available via a tax efficient ISA product wrapper.
Labels & Accreditations
Finds funds classified under Article 8 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 8 of the SFDR is a set of requirements that apply to financial products that 'promote' environmental or social characteristics with high governance also. These rules do not currently apply to UK funds so many managers may leave this field blank.
Fund Management Company Information
About The Business
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
Find fund management companies that actively encourage higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Find fund managers that vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' demonstrating their support for or disagreement with management policy. (*situations can legitimately, occasionally occur where voting proves impossible, but in principle all shares should be voted.)
Find fund managers that consider responsible ownership and ESG to be a key differentiator for their business.
Find funds run by fund managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Collaborations & Affiliations
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
A member of the Taskforce for Nature Related Financial Disclosures group which aims to aid risk management and shift money towards nature-positive outcomes.
Resources
Find fund management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Find a fund management company that directly employs specialist ESG/SRI/sustainability researchers or analysts. This allows asset managers to discuss environmental, social and governance risks and opportunities directly with companies.
Find fund management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors.
Finds organisations / fund managers that have one or more ESG/sustainability experts on all investment teams or 'desks' (all asset types)
Accreditations
Finds organisations / fund managers that have an A+ PRI rating - meaning they are highly rated according to the 'Principles of Responsible Investment'
Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave like responsible, typically longer term 'company owners'.
Company Wide Exclusions
Find funds / fund managers that are reviewing, or have reviewed, their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. (Typically with reference to climate change.)
Climate & Net Zero Transition
Fund management organisations that have pledged to reduce their greenhouse gas emissions to ‘net zero’. Strategies vary - this area is changing rapidly.
This asset management company has set a date by which they plan to achieve net zero greenhouse gas / CO2e emissions.
Find fund management companies that are working with the companies they invest in to encourage reductions in carbon dioxide and other greenhouse gas emissions.
Find fund management companies that are working to reduce their own (fund management company) carbon/greenhouse gas emissions.
Transparency
Find fund management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Find companies that publish information about their sustainable and responsible investment strategies on their company website.
Find fund management companies that will supply information about their sustainable and responsible investment activity on request.
Sustainable, Responsible &/or ESG Policy:
Firstly, all themes are designed such that they are aligned with probable policy change. All stocks must fit the theme, including this aspect. Therefore, by definition, all stocks selected are likely to be the right side of forthcoming changes in policy. In other words, all stocks selected for the portfolio should be part of the solution to societal goals, rather than part of the problem.
Secondly, all stocks considered for the portfolio are subject to our Sustainability Framework which integrates multiple aspects of business risk, including formal ESG inputs. This framework focuses on the strength of company and industry relationships with society – the societal license to operate – and how this might change over time. In particular, we believe the breakdown of these relationships is the key mechanism through which sustainability risks impact company fundamentals. The Sustainability Framework consists of a three-step process with the output being a series of scores, each incorporating a direction of change, which must pass a minimum threshold level. Our Sustainability Framework aims to ensures that companies with the potential to be damaged by a deterioration in societal license are excluded from the portfolio.
Finally, firm-wide resources matter and Lazard’s extensive ESG and sustainability resources are utilized by the Global Thematic team. Sustainability issues are discussed at our weekly firm-wide Global Thematic meeting. Our research teams each take responsibility for those analyzing sustainability issues which are most relevant and impactful for their industries, guided by Lazard’s materiality mapping. The firm’s sustainability scorecards, global sector workshop and ESG data sources are inputs into our Sustainability Framework.
ESG Watchlist
To create a check for our internal assessment, we create a watchlist of stocks that rate poorly in absolute and/or sector relative terms using third-party ESG data on a quarterly basis. Where strategies’ own securities that appear on the list, this creates an opportunity to check whether the risks identified are adequately reflected in our assessment.
Exclusions
Consistent with our aim to promote a higher standard of environmental and social characteristics for the fund we also apply a series of exclusions which are coded into our trading systems.
These are detailed below.
- Companies deriving more than 10% of revenue from military weapons
- Companies deriving more than 5% of revenue from tobacco production
- Companies deriving more than 30% of revenue from thermal coal production
- Companies that “fail” under UN Global Compact Principles
Process:
The Lazard Global Thematic / Global Thematic Focus funds target long-term structural change and managed using a three-stage thematic process. Environmental and social characteristics are promoted at each step of our process.
Broadly all stocks in our portfolio must fit within our themes and pass a sustainability scoring threshold. We promote solutions to long-term challenges through our theme design. We promote a higher standard of environmental and social characteristics through our scoring system.
Global Framework:
We represent what we believe are the key structural changes of the next decade in our Global Thematic Framework. This picture of the world is built bottom up from interactions with companies and experts. Insights from our Global Framework focus our attention on what is most relevant for long-term investors and help us identify the drivers of our themes. As long-term investors we believe it is critical to understand the evolving societal and policy landscape and the associated opportunities and risks. We believe that traditional investment analysis tends to underestimate the risks faced by some companies today.
Our current Framework focuses on the impact of and interplay between four key forces Technology, Geopolitics, Monetary Policy and Sustainability. Tensions between these different forces are rising, and the responses are likely to define the investment landscape for the next decade. We note the potential is building for a sea change in policy. We carefully monitor these shifts for the investment opportunities and risks that define our themes. Policy shifts around Climate Change and inequality are considered at this level.
Themes:
We construct and populate themes within our portfolio that looks to exploit the structural changes identified by our Global Framework, with consideration for the risks identified.
Our themes are designed such that they are aligned with probable policy change. All stocks must fit the theme, including this aspect. Therefore, by definition, all stocks selected are likely to be the right side of forthcoming changes in policy. In other words, all stocks selected for the portfolio should be part of the solution to societal goals, rather than part of the problem.
At theme level, we believe that sustainability analysis offers an opportunity to enhance return and mitigate risk through identification of long-term societal change. This incorporates consideration of the direction of future policy via frameworks such as the United Nations Sustainable Development Goals (UN SDGs) and global Climate Change policy. For clarity, our portfolio does not incorporate impact objectives into our theme design. Our approach to sustainability is fundamentally based. We aim to incorporate an assessment of material opportunity by integration through each stage of our investment process.
Examples of current themes:
- Asset Efficiency: Building and industrial efficiency
- Bits of Chips: Electric vehicles and renewables
- Energy Transitions: Renewable energy, energy efficiency, Decarbonized fossil fuel
Stocks
At stock level we promote a higher standard of environmental and societal characteristics through three elements.
Sustainability Framework
All stocks are subject to analysis under our Sustainability Framework test which attempts to ensure that all stocks will sustain their societal license to operate. This framework, in our view, offers a consistent way to evaluate sustainability and has the potential to generate positive, differentiated long-term returns for the portfolio.
This framework focuses on the strength of company and industry relationships with society – the societal license to operate – and how this might change over time. In particular, we believe the breakdown of these relationships is the key mechanism through which sustainability risks impact company fundamentals. The Sustainability Framework consists of a three-step process with the output being a series of scores, each incorporating a direction of change, which must pass a minimum threshold level. Our Sustainability Framework aims to promote a higher standard of environmental and social characteristics for holdings within the fund with the aim of avoiding companies with the potential to be damaged by a deterioration in societal license.
Recognizing that ESG data is an important input but generally backward looking, we incorporate fundamental analysis and direction of change to create a forward looking framework. Examples of ESG criteria we consider are regulation, changing attitudes, demographics, externalities (e.g. environmental), controversies and responses. These inputs will be judged on their materiality to our evaluation of the societal license to operate of the Industry (our Society / Industry score) and the company (our Society / Company score) in addition to the relative strength of a company within its industry and its ability to change (our Company/ Industry score).
We use a matrix as a visual representation of our relationship assessments and their cumulative impact. Relationships that are good or neutral, and improving or steady, do not represent risks and hence are evaluated in the matrix as Green. Direction of change becomes relevant in two instances. Firstly, strong companies on a deteriorating trend can become poor investments. Relationships that are good or neutral today but are potentially deteriorating are therefore evaluated as Amber. Secondly, companies that have historically had a weak relationship with society but are adapting to become more aligned with societal expectations are potentially very interesting investments. Therefore weak relationships that are improving are evaluated as Green. Finally, weak relationships that are steady represent a latent risk and are marked as Amber. An already weak relationship on a deteriorating trend is marked as Red. We are now in a position to evaluate the investment against our threshold. Two or more Amber evaluations represent a compounding of risks that fails our framework’s threshold.
The intention of the Framework is to avoid compounding risks across multiple relationships. For example, industries with negative or weak relationships with society are lightning rods for regulation and media attention. Since only one amber Fail is allowed in our process, order to pass our framework a company operating in such an industry must Pass the other two assessments. We use the example of why we own Alphabet but do not own Facebook in our white paper.
Please see our white paper, “A Sustainability Framework: Societal Shifts as Investment Risks” for further information.
Resources, Affiliations & Corporate Strategies:
Lazard has a dedicated ESG team responsible for setting the firm’s responsible investment goals, conducting ESG training, educating investment professionals on relevant ESG issues and trends, facilitating ESG client reporting, and helping oversee overall development and implementation of our ESG policies.
To lead and coordinate Lazard’s Sustainable Investment & ESG, Lazard has appointed Co-Heads of Sustainable Investment and ESG, Nikita Singhal and Jennifer Anderson. Singhal and Anderson joined Lazard in December 2018 and January 2019, respectively. They have since been joined by Filiberto Fabbro (Nov 20201), Olivia Tidd (June 2021), Tim Smith (July 2021), Prad Parhi (Sept 2021), and Rebecca Greenberg (Oct 2021), Victoire Spahn (November 2021), and Alexis Huseby (January 2022) who serve as Research Analysts on the team, as well as Elly Irving as Director of Stewardship (Sept 2021) and Roland Bosch (March 2021) who are focused on Stewardship, Frank Blasio (Aug 2021), who is focused on Thought Leadership, George Clift as a Product Specialist (April 2021), and Cristina Rebello as a Business Analyst (Aug 2021). The team is an integral part of the global investment platform and works closely with analysts and portfolio managers to coordinate and advance our long-standing efforts to further enhance and develop our ESG capabilities.
Involvement with industry groups and initiatives
The field of Sustainable Investment is evolving very rapidly. To further advance our knowledge and influence emerging standards, we collaborate with organizations that promote Sustainable Investment and ESG integration. This helps us understand and set strategic priorities and look at further sustainability standards and disclosures that will broaden the adoption of sustainable investment. We are a member or signatory to various organizations that promote sustainable investing. These are as follows:
General:
- United Nations-supported Principles for Responsible Investment (PRI) – Lazard Asset Management has been a signatory to the PRI since 2014.
- International Accounting Standards Board (IASB) Investors in Financial Reporting programme – LAM has been a member since 2016 and regularly participates in investor outreach initiatives.
- Chief Executives for Corporate Purpose (CECP) – LAM has been a member of the advisory board of the CECP’s CEO Investor Forum since 2019.
- Pensions and Lifetime Savings Association (PLSA) – LAM London has been a member of the PLSA since 2006.
- Sustainability Accounting Standards Board (SASB) – Lazard Asset Management has been a member since 2019.
- Abu Dhabi Sustainable Finance Declaration – Lazard Asset Management became a signatory in 2020.
- UN Global Compact - Lazard Ltd. became a participant in the UN Global Compact in 2021. Please see here our letter of commitment.
- Responsible Investment Association Canada – In early 2022. LAM became a member of RIA, which seeks to promote responsible investment in Canada.
Stewardship and Governance:
- International Corporate Governance Network (ICGN) – Several LAM professionals are members of the ICGN going back to 1999 and our investment professionals regularly attend their conferences.
- Japan’s Stewardship Code – Lazard Japan Asset Management K.K. has been a signatory to Japan’s Stewardship Code since 2014.
- Korea Stewardship Code – Lazard Korea Asset Management Co., Ltd. has been a signatory for the Korea Stewardship Code in the Korea Corporate Governance Service (KCGS) since 2019.
- FAIRR (Farm Animal Investment Risk & Return) Initiative – LAM became a member in 2020.
- Board of Director Training Institute of Japan (BDTI) – In 2021, LAM became a supporter of BDTI, which aims to provide training to board members to improve corporate governance in Japan.
Environment:
- Institutional Investors Group for Climate Change (IIGCC) – LAM has been a member of the Institutional Investors Group for Climate Change since 2019.
- Task Force on Climate-Related Financial Disclosures (TCFD) – LAM has been a supporter since 2019.
- CDP (formerly, the Carbon Disclosure Project) – LAM became an investor signatory in 2020.
- CDP Science-Based Targets Campaign – In October 2020, LAM was part of the campaign calling on companies to set a 1.5°C science based target.
- Net Zero Asset Manager Initiative – LAM became one of the first US-based asset managers to join this initiative in March 2021. Please refer to Net Zero Asset Manager Initiative press release.
- 2021 Global Investor Statement to Governments on the Climate Crisis – In the lead up to COP26 in Glasgow, LAM became a signatory to the one-time collaborative statement by investors calling for governments to be more ambitious with their carbon reduction targets, incentivize private finance for net zero solutions, develop just transition plans for affected workers &communities, ensure COVID-19 recovery plans support the transition, and mandate climate risk disclosures.
- Taskforce on Nature-Related Financial Disclosures (TNFD) – In early 2022, LAM became a member of the TNFD Forum, which aims to aid in the development and delivery of a risk management and disclosure framework for organizations to report and act on evolving nature-related risks.
Diversity & Inclusion:
- 30% Club - Lazard is a founding supporter and member of the 30% Club since 2015 and has rolled out its cross-company mentoring program both in the United States and the United Kingdom since 2016
- UK Women in Finance Charter – LAML has been a signatory to the UK Women in Finance Charter since 2018.
- CEO Action for Diversity & Inclusion Pledge – Lazard Ltd’s CEO Ken Jacobs signed the pledge in December 2020 to build a stronger and more diverse workforce and expand mentorship and allyship in the workplace.
In addition, one of our fixed income portfolio managers serves on the PRI Fixed Income Advisory Committee.
SDR Labelling: Not eligible to use label
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
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|---|---|---|---|---|---|---|---|---|
Lazard Global Thematic Focus Fund |
Sustainability Tilt | Not eligible to use label | SICAV/Offshore | Global | Equity | 19/12/2019 | Aug 2022 | |
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Fund Size: £517.12m (as at: 31/12/2024) ISIN: IE00BKX9F080, IE000BHPX359, IE000CPX1LX6, IE0000XZS910, IE000P2SXPB6 |
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Sustainable, Responsible &/or ESG OverviewNo response when requested update from fund manager (March 2024)
Our strategy is “thematic”, focused on long-term structural change. We aim to identify key shifts in business models, industries, economies, and markets, and from these insights create multiple themes. Sustainability analysis offers an opportunity to enhance return and mitigate risk. From a return perspective structural shifts in society and policy may provide potential investment tailwind. As thematic investors we are able to capture this opportunity set through our theme design. From a risk perspective holdings are evaluated using our proprietary Sustainability framework, this scoring threshold provides a comprehensive and intellectually robust approach to framing and implementation of complex ESG and sustainability risks. Our UCITS vehicle also implements a series of exclusions based on UNGC failure, tobacco, controversial weapons and thermal coal. We promote solutions to long-term challenges through our theme design and a higher standard of environmental and social characteristics through our scoring system. |
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|
Primary fund last amended: Aug 2022 |
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|
Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Sustainability policy
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Sustainability focus
Find funds which substantially focus on sustainability issues
Sustainability theme or focus
Find funds where there is a significant emphasis on (environmental and social) sustainability. Funds with a 'sustainability theme' typically place more emphasis on the area than funds with a 'sustainability policy' - meaning that it is more likely to drive investment selection. Strategies vary. See fund information for further detail.
Sustainable transport policy or theme
Find funds that have documented policies or thematic investment approaches relating to investment in more sustainable, greener transport methods. These will typically set out a preference for companies that run, enable or support more sustainable methods of transport. See fund information for further detail.
Encourage more sustainable practices through stewardship
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
UN Global Compact linked exclusion policy
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/ Environmental - General
Environmental policy
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
Limits exposure to carbon intensive industries
Funds that limit or 'reduce' their exposure to carbon intensive industries (ie sectors which are major contributors to climate change. Funds vary - some funds may be 'underweight' in this area which means they may have some investment in highly carbon intensive areas. Funds of this kind may choose companies they consider to be 'best in sector' and encourage ever higher standards. Strategies vary. See fund information for further details.
Environmental damage and pollution policy
Funds that have written policies explaining the approach they take when companies damage the environment or are significant polluters. Funds of this kind may work with companies to encourage higher standards, or exclude companies - sometimes dependent on the situation. Strategies vary. See fund information for further detail.
Resource efficiency policy or theme
Find funds that have a policy or theme that relates to managing natural resources more efficiently. Funds with this policy will be likely to favour companies that make (or enable the) more efficient use of resources - and either avoid or encourage change amongst companies with lower standards. Strategies vary. See fund information for further detail.
Favours cleaner, greener companies
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail. Climate Change & Energy
Clean / renewable energy theme or focus
Find funds where investment in clean / renewable energy companies an other assets is central to their investment selection strategy. The proportion of the fund that is directly or indirectly invested in renewable energy varies between funds and over time. See fund information for further details.
Encourage transition to low carbon through stewardship activity
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Energy efficiency theme
Fund funds that have an energy efficiency theme - typically meaning that a fund manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Invests in clean energy / renewables
Funds that hold companies in the clean energy and renewable energy sectors (at the time research was supplied). Fund strategies vary, in particular the proportion of investment in these areas may vary significantly. Check fund literature for details.
Nuclear exclusion policy
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail. Social / Employment
Social policy
Find funds that have policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). Funds with social policies typically avoid companies with low standards or work to encourage higher standards. See fund information for detail. Ethical Values Led Exclusions
Tobacco and related product manufacturers excluded
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Armaments manufacturers avoided
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details. Human Rights
Human rights policy
Find funds that have policies relating to human rights issues. Funds of this kind typically require companies to demonstrate higher standards, although some fund managers work to encourage improvements. Investee companies are often judged against internationally agreed norms or standards. Strategies vary. See fund information for further detail. Governance & Management
Governance policy
Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices. Strategies vary. See fund literature for further information.
Avoids companies with poor governance
Find funds that aim to avoid investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards. See fund literature for further information.
Encourage board diversity e.g. gender
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Encourage higher ESG standards through stewardship activity
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity Fund Governance
ESG integration strategy
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature. Asset Size
Over 50% large cap companies
Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Invests in small, mid and large cap companies / assets
Find a fund that invests in a combination of small, medium and larger (potentially multinational)companies. Impact Methodologies
Invests in environmental solutions companies
Find funds that direct investment towards companies where a major part of their business is about solving environmental challenges. e.g. companies helping to address climate change.
Invests in social solutions companies
Find funds that invest in companies where a major part of their business is specifically aimed at helping to address social challenges. e.g. companies helping to address poverty.
Invests in sustainability / ESG disruptors
Find funds that specifically set out to invest in companies that are regarded as 'disrupting' existing business practices - typically through the development of innovative (sustainability aware) products and/or practices. How The Fund Works
Positive selection bias
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Negative selection bias
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
Limited / few ethical exclusions
Find funds with few exclusions - typically for example exclude tobacco or companies that breach commonly adopted standards or norms such as the UN Global Compact.
Combines norms based exclusions with other SRI criteria
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Combines ESG strategy with other SRI criteria
Find funds that have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
Balances company 'pros and cons' / best in sector
Find funds that consider both the 'positive' and 'negative' aspects of company behaviour and make balanced, considered decisions as part of their investment approach. May apply to a range of different issues and policy areas.
Norms focus
Find funds that use internationally agreed standards, conventions and 'norms' to help direct where the fund can and cannot invest (e.g. the UN Global Compact, UN Sustainable Development Goals). Read fund literature for further information.
Focus on ESG risk mitigation
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
SRI / ESG / Ethical policies explained on website
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies). Intended Clients & Product Options
Intended for investors interested in sustainability
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Available via an ISA (OEIC only)
Find funds that are available via a tax efficient ISA product wrapper. Labels & Accreditations
SFDR Article 8 fund / product (EU)
Finds funds classified under Article 8 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 8 of the SFDR is a set of requirements that apply to financial products that 'promote' environmental or social characteristics with high governance also. These rules do not currently apply to UK funds so many managers may leave this field blank. Fund Management Company InformationAbout The Business
Responsible ownership / stewardship policy or strategy (AFM company wide)
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
ESG / SRI engagement (AFM company wide)
Find fund management companies that actively encourage higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Vote all* shares at AGMs / EGMs (AFM company wide)
Find fund managers that vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' demonstrating their support for or disagreement with management policy. (*situations can legitimately, occasionally occur where voting proves impossible, but in principle all shares should be voted.)
Responsible ownership / ESG a key differentiator (AFM company wide)
Find fund managers that consider responsible ownership and ESG to be a key differentiator for their business.
Responsible ownership policy for non SRI funds (AFM company wide)
Find funds run by fund managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
Integrates ESG factors into all / most (AFM) fund research
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
In-house diversity improvement programme (AFM company wide)
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex. Collaborations & Affiliations
PRI signatory
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
TNFD forum member (AFM company wide)
A member of the Taskforce for Nature Related Financial Disclosures group which aims to aid risk management and shift money towards nature-positive outcomes. Resources
In-house responsible ownership / voting expertise
Find fund management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Employ specialist ESG / SRI / sustainability researchers
Find a fund management company that directly employs specialist ESG/SRI/sustainability researchers or analysts. This allows asset managers to discuss environmental, social and governance risks and opportunities directly with companies.
Use specialist ESG / SRI / sustainability research companies
Find fund management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors.
ESG specialists on all investment desks (AFM company wide)
Finds organisations / fund managers that have one or more ESG/sustainability experts on all investment teams or 'desks' (all asset types) Accreditations
PRI A+ rated (AFM company wide)
Finds organisations / fund managers that have an A+ PRI rating - meaning they are highly rated according to the 'Principles of Responsible Investment'
UK Stewardship Code signatory (AFM company wide)
Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave like responsible, typically longer term 'company owners'. Company Wide Exclusions
Review(ing) carbon / fossil fuel exposure for all funds (AFM company wide)
Find funds / fund managers that are reviewing, or have reviewed, their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. (Typically with reference to climate change.) Climate & Net Zero Transition
Net Zero commitment (AFM company wide)
Fund management organisations that have pledged to reduce their greenhouse gas emissions to ‘net zero’. Strategies vary - this area is changing rapidly.
Net Zero - have set a Net Zero target date (AFM company wide)
This asset management company has set a date by which they plan to achieve net zero greenhouse gas / CO2e emissions.
Encourage carbon / greenhouse gas reduction (AFM company wide)
Find fund management companies that are working with the companies they invest in to encourage reductions in carbon dioxide and other greenhouse gas emissions.
In-house carbon / GHG reduction policy (AFM company wide)
Find fund management companies that are working to reduce their own (fund management company) carbon/greenhouse gas emissions. Transparency
Publish responsible ownership / stewardship report (AFM company wide)
Find fund management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Full SRI / responsible ownership policy information on company website
Find companies that publish information about their sustainable and responsible investment strategies on their company website.
Full SRI / responsible ownership policy information available on request
Find fund management companies that will supply information about their sustainable and responsible investment activity on request. Sustainable, Responsible &/or ESG Policy:Firstly, all themes are designed such that they are aligned with probable policy change. All stocks must fit the theme, including this aspect. Therefore, by definition, all stocks selected are likely to be the right side of forthcoming changes in policy. In other words, all stocks selected for the portfolio should be part of the solution to societal goals, rather than part of the problem. Secondly, all stocks considered for the portfolio are subject to our Sustainability Framework which integrates multiple aspects of business risk, including formal ESG inputs. This framework focuses on the strength of company and industry relationships with society – the societal license to operate – and how this might change over time. In particular, we believe the breakdown of these relationships is the key mechanism through which sustainability risks impact company fundamentals. The Sustainability Framework consists of a three-step process with the output being a series of scores, each incorporating a direction of change, which must pass a minimum threshold level. Our Sustainability Framework aims to ensures that companies with the potential to be damaged by a deterioration in societal license are excluded from the portfolio. Finally, firm-wide resources matter and Lazard’s extensive ESG and sustainability resources are utilized by the Global Thematic team. Sustainability issues are discussed at our weekly firm-wide Global Thematic meeting. Our research teams each take responsibility for those analyzing sustainability issues which are most relevant and impactful for their industries, guided by Lazard’s materiality mapping. The firm’s sustainability scorecards, global sector workshop and ESG data sources are inputs into our Sustainability Framework.
ESG Watchlist To create a check for our internal assessment, we create a watchlist of stocks that rate poorly in absolute and/or sector relative terms using third-party ESG data on a quarterly basis. Where strategies’ own securities that appear on the list, this creates an opportunity to check whether the risks identified are adequately reflected in our assessment.
Exclusions Consistent with our aim to promote a higher standard of environmental and social characteristics for the fund we also apply a series of exclusions which are coded into our trading systems. These are detailed below.
Process:The Lazard Global Thematic / Global Thematic Focus funds target long-term structural change and managed using a three-stage thematic process. Environmental and social characteristics are promoted at each step of our process. Broadly all stocks in our portfolio must fit within our themes and pass a sustainability scoring threshold. We promote solutions to long-term challenges through our theme design. We promote a higher standard of environmental and social characteristics through our scoring system.
Global Framework: We represent what we believe are the key structural changes of the next decade in our Global Thematic Framework. This picture of the world is built bottom up from interactions with companies and experts. Insights from our Global Framework focus our attention on what is most relevant for long-term investors and help us identify the drivers of our themes. As long-term investors we believe it is critical to understand the evolving societal and policy landscape and the associated opportunities and risks. We believe that traditional investment analysis tends to underestimate the risks faced by some companies today.
Our current Framework focuses on the impact of and interplay between four key forces Technology, Geopolitics, Monetary Policy and Sustainability. Tensions between these different forces are rising, and the responses are likely to define the investment landscape for the next decade. We note the potential is building for a sea change in policy. We carefully monitor these shifts for the investment opportunities and risks that define our themes. Policy shifts around Climate Change and inequality are considered at this level.
Themes: We construct and populate themes within our portfolio that looks to exploit the structural changes identified by our Global Framework, with consideration for the risks identified. Our themes are designed such that they are aligned with probable policy change. All stocks must fit the theme, including this aspect. Therefore, by definition, all stocks selected are likely to be the right side of forthcoming changes in policy. In other words, all stocks selected for the portfolio should be part of the solution to societal goals, rather than part of the problem. At theme level, we believe that sustainability analysis offers an opportunity to enhance return and mitigate risk through identification of long-term societal change. This incorporates consideration of the direction of future policy via frameworks such as the United Nations Sustainable Development Goals (UN SDGs) and global Climate Change policy. For clarity, our portfolio does not incorporate impact objectives into our theme design. Our approach to sustainability is fundamentally based. We aim to incorporate an assessment of material opportunity by integration through each stage of our investment process. Examples of current themes:
Stocks At stock level we promote a higher standard of environmental and societal characteristics through three elements.
Sustainability Framework All stocks are subject to analysis under our Sustainability Framework test which attempts to ensure that all stocks will sustain their societal license to operate. This framework, in our view, offers a consistent way to evaluate sustainability and has the potential to generate positive, differentiated long-term returns for the portfolio. This framework focuses on the strength of company and industry relationships with society – the societal license to operate – and how this might change over time. In particular, we believe the breakdown of these relationships is the key mechanism through which sustainability risks impact company fundamentals. The Sustainability Framework consists of a three-step process with the output being a series of scores, each incorporating a direction of change, which must pass a minimum threshold level. Our Sustainability Framework aims to promote a higher standard of environmental and social characteristics for holdings within the fund with the aim of avoiding companies with the potential to be damaged by a deterioration in societal license. Recognizing that ESG data is an important input but generally backward looking, we incorporate fundamental analysis and direction of change to create a forward looking framework. Examples of ESG criteria we consider are regulation, changing attitudes, demographics, externalities (e.g. environmental), controversies and responses. These inputs will be judged on their materiality to our evaluation of the societal license to operate of the Industry (our Society / Industry score) and the company (our Society / Company score) in addition to the relative strength of a company within its industry and its ability to change (our Company/ Industry score). We use a matrix as a visual representation of our relationship assessments and their cumulative impact. Relationships that are good or neutral, and improving or steady, do not represent risks and hence are evaluated in the matrix as Green. Direction of change becomes relevant in two instances. Firstly, strong companies on a deteriorating trend can become poor investments. Relationships that are good or neutral today but are potentially deteriorating are therefore evaluated as Amber. Secondly, companies that have historically had a weak relationship with society but are adapting to become more aligned with societal expectations are potentially very interesting investments. Therefore weak relationships that are improving are evaluated as Green. Finally, weak relationships that are steady represent a latent risk and are marked as Amber. An already weak relationship on a deteriorating trend is marked as Red. We are now in a position to evaluate the investment against our threshold. Two or more Amber evaluations represent a compounding of risks that fails our framework’s threshold. The intention of the Framework is to avoid compounding risks across multiple relationships. For example, industries with negative or weak relationships with society are lightning rods for regulation and media attention. Since only one amber Fail is allowed in our process, order to pass our framework a company operating in such an industry must Pass the other two assessments. We use the example of why we own Alphabet but do not own Facebook in our white paper. Please see our white paper, “A Sustainability Framework: Societal Shifts as Investment Risks” for further information. Resources, Affiliations & Corporate Strategies:Lazard has a dedicated ESG team responsible for setting the firm’s responsible investment goals, conducting ESG training, educating investment professionals on relevant ESG issues and trends, facilitating ESG client reporting, and helping oversee overall development and implementation of our ESG policies. To lead and coordinate Lazard’s Sustainable Investment & ESG, Lazard has appointed Co-Heads of Sustainable Investment and ESG, Nikita Singhal and Jennifer Anderson. Singhal and Anderson joined Lazard in December 2018 and January 2019, respectively. They have since been joined by Filiberto Fabbro (Nov 20201), Olivia Tidd (June 2021), Tim Smith (July 2021), Prad Parhi (Sept 2021), and Rebecca Greenberg (Oct 2021), Victoire Spahn (November 2021), and Alexis Huseby (January 2022) who serve as Research Analysts on the team, as well as Elly Irving as Director of Stewardship (Sept 2021) and Roland Bosch (March 2021) who are focused on Stewardship, Frank Blasio (Aug 2021), who is focused on Thought Leadership, George Clift as a Product Specialist (April 2021), and Cristina Rebello as a Business Analyst (Aug 2021). The team is an integral part of the global investment platform and works closely with analysts and portfolio managers to coordinate and advance our long-standing efforts to further enhance and develop our ESG capabilities.
Involvement with industry groups and initiatives The field of Sustainable Investment is evolving very rapidly. To further advance our knowledge and influence emerging standards, we collaborate with organizations that promote Sustainable Investment and ESG integration. This helps us understand and set strategic priorities and look at further sustainability standards and disclosures that will broaden the adoption of sustainable investment. We are a member or signatory to various organizations that promote sustainable investing. These are as follows:
General:
Stewardship and Governance:
Environment:
Diversity & Inclusion:
In addition, one of our fixed income portfolio managers serves on the PRI Fixed Income Advisory Committee.
SDR Labelling: Not eligible to use label |
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