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SPDR® Blmbg Em Mkts Lcl Bd ETF EBND Sustainability

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Sustainability Analysis

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Sustainability Summary

SPDR ® Blmbg Em Mkts Lcl Bd ETF has several promising attributes that may appeal to sustainability-focused investors.

This fund has relatively low exposure to ESG risk compared with its peers in the Emerging Markets Fixed Income category, earning it the second highest Morningstar Sustainability Rating of 4 globes. ESG risk provides investors with a signal that reflects to what degree their investments are exposed to risks related to material ESG issues, including climate change, biodiversity, product safety, community relations, data privacy and security, bribery and corruption, and corporate governance, that are not sufficiently managed. ESG risk differs from impact, which is about seeking positive environmental and social outcomes.

Currently, the fund's involvement in fossil fuels is negligible, and compares favorably with 19.7% for its average peer. No companies held by SPDR® Blmbg Em Mkts Lcl Bd ETF are recognized as being involved in controversies at a high or severe level. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that have a negative impact on stakeholders or the environment, which create some degree of financial risk for the company. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. In addition, they can damage the reputation of both companies themselves and their shareholders.

One potential issue for a sustainability-focused investor is that SPDR® Blmbg Em Mkts Lcl Bd ETF doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes.

SPDR® Blmbg Em Mkts Lcl Bd ETF has a 12-month asset-weighted Carbon Risk Score of 15.3. This is situated at the lower end of the medium carbon risk band, suggesting that its portfolio holdings are not among the worst-positioned to transition to a low-carbon economy, but they are not among the best-positioned either. Investors concerned about the transition risks may prefer to consider funds with negligible or low carbon risk. Such funds invest in companies that tend to operate in sectors less exposed to the transition (such as healthcare and IT) and/or companies in more carbon-intensive sectors (such as industrials and utilities) but that consider climate change in their business strategy and products, and therefore are positively aligned with the transition.

ESG Commitment Level Asset Manager