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Janus Henderson Sustainable Corp Bd ETF SCRD Sustainability

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Sustainability Analysis

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Sustainability Summary

Janus Henderson Sustainable Corp Bd ETF has a number of positive attributes that may appeal to sustainability-focused investors.

This fund has relatively low exposure to ESG risk compared with its peers in the US Fixed Income category, earning it the second highest Morningstar Sustainability Rating of 4 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.

Janus Henderson Sustainable Corp Bd ETF holds itself out to be a sustainable or ESG-focused investment. In other words, ESG concerns are central to the investment process of this strategy. A fund with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes. One key area of strength for Janus Henderson Sustainable Corp Bd ETF is its low Morningstar Portfolio Carbon Risk Score of 6.96 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy.

Janus Henderson Sustainable Corp Bd Etf shows 10.5% involvement in carbon solutions. This percentage surpasses the 6.4% average involvement of its peers in the Corporate Bond category. Carbon solutions include products and services related to renewable energy, energy efficiency, green buildings, green transportation, and so on. The fund aims to avoid or minimize holdings in companies breaching international norms, including the UN Global Compact or the Universal Declaration of Human Rights.

By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with controversial weapons, tobacco, and and small arms. Yet this goal is far from achieved, as the fund exhibits 1.59% and 0.79% exposure to controversial weapons and small arms, respectively. This compares with 0.71% and 0.29% for its average peer in the US Fixed Income category.

The fund has a modest level of exposure (2.98%) to companies with high or severe controversies. Companies with controversies are involved in incidents such as corruption, employee abuses, and that pose some degree of business risks to the company. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. In addition, they controversies can damage the reputation of both companies themselves and their shareholders.

ESG Commitment Level Asset Manager