Global equity funds

There are many subtly different definitions of ESG, or Environmental, Society and Governance, investing available. The definition used for the IFSL CAF ESG funds is the consideration of environmental, social and governance factors alongside financial factors in the investment decision-making process.

• Environmental factors relate to how a company views itself with regard to environmental conservation and sustainability. Types of environmental risks and opportunities include a company’s energy consumption, waste disposal, land development and carbon footprint, among others.

• Social factors deal with a company’s relationship with its employees and vendors. Risks and opportunities can include (but aren’t limited to) a company’s initiatives related to employee health and well-being, and how supplier relationships align with corporate values.

• Corporate governance factors can include the corporate decision-making structure, independence of board members, treatment of minority shareholders, executive compensation and political contributions, among others.

These broad categories are just a starting point for an in-depth ESG risk assessment, but they reveal critical information about a company’s values and practices, as well as a number of potential risks that should be identified and managed before investing.

Firstly LGT Wealth Management (LGT) will screen out any investments that we believe are not acceptable to most charitable investors, for example firms that manufacture cluster munitions or landmines or derive more than 5% of revenue from tobacco. 

LGT then score the remaining universe of companies for their ESG credentials, using a combination of third party data and their own research and knowledge. They will select investments that they believe will lead to the Funds achieving a high ESG score as assessed by an independent ESG ratings agency. 

For more detailed information, you can find the Funds’ Responsible Investment Policy here.

You can also find out more about LGT’s integrated approach to Sustainability here.

There are many different names and interpretations attached to investment strategies that seek to address global issues or deliver wider benefits as well as a financial return.
There are no generally accepted definitions for these approaches although they are in development with a number of organisations. At this stage we suggest that you look at the fund policies to see the approach rather than rely on a categorisation.

The IFSL CAF ESG Funds are not designed to impact on one specific outcome, for example Climate Change. Rather they look to deliver sustainable, long-term returns, as well as helping to address the challenges faced by the world today