SRI: The Investor’s

Perspective

Workshop

D2 Assignment (40% of the grade with D3)

2 PEOPLE GROUP’S FUND ASSESSMENT & RANKING (STEP 1)

2-people group
Team Name
members
(letter)
(mandatory)

Please report below on the grid your assessment of each fund of your subset. Give your reasons and
the sources you used. Rank the funds, considering their alignment with your vision and expectations
regarding SRI and ESG issues.
For each fund, you have to analyze the portfolio (10 top holdings) and to assess :
 the coherence between the labeling and documentation of the fund (“ESG”, “SRI”, “Green”,
labeling, S&P, MSCI ESG scores, SR labels) and the portfolio composition (industries’ and
corporates’ ESG profiles and ESG scores) and fund policy and disclosures.
 Regarding the last point, rely on the concepts presented in session 5 and the criteria
defined in D1
 the alignment between the fund policy, portfolio composition, information, and transparency
and your team’s expectations and criteria (grade from 3: perfectly aligned to 0: not aligned
at all).
Be careful not to rely your assessment upon funds’ documentation or funds’ sustainability score
(Morningstar or MSCI) only. Critically review the fund’s assertions, portfolio composition, and even
Morningstar’s scores by using all the provided resources and doing additional research on the
Internet. Then explain accurately how the fund matches your team’s expectations and criteria.
Analyzing the portfolio composition (top ten holdings) and verifying that it’s consistent with the fund’s
commercial promises is an essential part of the required work.
Since your mission is to constitute a universe of responsible funds, without considering financial
performance at this step, don’t use financial performance as a criterion for assessing and ranking
the funds and don’t make a financial analysis of the fund. You can nevertheless add a separate
score regarding this dimension.

🢂 Please do not change the layout of this document (the following pages are in landscape mode)
[Section break – Please do not erase]

UD: Apr 4, 2023 © François Mangin@NEOMA Business School, 2020

 Indicate your assessment and reasons (positives and negative) for your ranking, with a specification of
Rank SRI Fin
the holding(s) that most contributed to your global positive/negative assessment of the fund against the
1: best align. Fund/ETF name Perf.
criteria you defined in D1 assignment. Please indicate sources used for assessing the portfolio
choice (3 to 0)
composition.

+  Morningstars rating : 4 stars (a good rating)

Fund policy  Corporate Sustainability Score : 19,13 (a low risk)
& mgt

- High SRRI risk: 6/7

BNP Paribas Funds  The Portfolio : Novartis AG, LVMH, Roche, Total energies (healthcare, consumer
1
Sustainable Europe Portfolio + cyclical and energy in majority).
3
Multi-Factor Equity composition  The Portfolio have good ESG risk rating (4 for Novartis and LVMH, 3 for Roche).
Classic EUR (incl. sources) Novartis is well ranked: leader over 77 other pharmaceutical companies
Accumulation - * Presence of total energies in the portfolio which does not have a good ESG risk rating (2)
 There is a good transparency on the sustainable indicators : . 66.61 versus 59.98 for
Information & +
Benchmark.
transparency
-
General opinion
This portfolio can meet our criteria, we can invest but on a small scale

 We have the option to invest globally through the International Fund by employing
Fund policy +
a single, unique fund.
& mgt
 Those with lower-rated industries (including the technology industry, energy, and
-
pharmaceuticals) are the key participants in a sectoral gap.
Portfolio +  + The Fund received AAA for MSCI. 68% of the fund's holdings receive an MSCI ESG
composition Rating of AAA or AA (ESG Leaders) and 0% receive an MSCI ESG Rating of B or
2 (incl. sources)
2 CCC (ESG Laggards). + 0% exposure to UNGC Violations; 0% exposure to
DWS Invest ESG Equity
Income USD IC Controversial Weapons, 0 % exposure to Tobacco.
-  Industry (technology, energy, and pharmaceuticals) that are not often given high ratings
 From two completely Only a few of the less well-known companies involved in it are
+ known for their commitment to social responsibility.distinct sources assessing the risk
Information & of the fund, graphically growing from the base.
transparency

-
 The fund is being investigated as an ESG fund, but the key sectors that make up its composition are not
General opinion involved. As a result, we don't have a lot of information and different viewpoints based on the notation
sites. Rentability is increasing and staying steady.
  Morningstar rating : Silver (4/5) stars and UK Large-Cap Equity ( Localisation in UK: this has
Fund policy + a negative impact on the good ESG score because it is an oil company
& mgt 94,58%) ; Corporate Sustainability Score : 19,8; Governance : 6,33
-  High risk on the social pillars: 8,31
 Astrazeneca, HSBC holding, Unilever (Healthcare : 7,91%) and the average of the rating
3 Portfolio +
ESG fund is a good score : 6/7
1 L&G composition
 Also Shell in the portfolio,
(incl. sources) -
this has a negative impact on the good ESG score because it is an oil company

Information & +  The portfolio is made up of companies with a high ESG score, which is a positive aspect
transparency -
Despite very positive elements, the portfolio does not meet our criteria (presence of Shell in
General opinion
the portfolio)
 Morning Star Sustainable rating : 4/5
Fund policy +
& mgt
-  Social Pillars (9,6 => Higher risk), Localized in the United States (98.21%)
 This rating is appropriate based on our standards. However, it could not be accurate
Portfolio + because Coca-Cola's ESG score is not available.
composition  ESG fund average rating: 4.66 out of 7
(incl. sources)
-
4
 These include goods and services for green construction, green transportation, and
0 Nuveen +
renewable energy
 Fossil fuel commitment (9.98%) => This remains below the industry standard for its
category.Low likelihood of encountering contentious weapons (0.85%) (Under par with
peers)
Information & - Information regarding ESG standards is not transparent for Coca-Cola. The overall ranking is really
transparency poor.
 Additionally: The majority of companies score poorly (low or very poorly) for data
transparency, while some companies have data that is not readily available (a symptom of
low transparency).
 General opinion
This portfolio can meet our criteria, we can invest but on a small scale

Sources used (mandatory) :

https://www.bnpparibas-am.co.uk/professional-investor/fundsheet/equity/bnp-paribas- sustainable-europe-multi-factor-equity-privilege-c-lu1956135328/?tab=overview
https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00001457X
Notes
https://ffor
undsthe
.dwsD4 assignment
.com/en-lu/equity-funds/lu2022030352-dws-invest-esg-equity-income-usd-ic/
https://www.nuveen.com/en-us/exchange-traded-funds/nulv-nuveen-esg-large-cap-value-etf
What difficulties (if any) did you encounter in analyzing and ranking the funds?
https://www.legalandgeneral.com/investments/funds/full-fund-range/future-world/future-world-esg-uk-index-
fund/