Northern Global Tactical Asset Allc Fund may not appeal to sustainability-conscious investors.
This fund has above-average exposure to ESG risk relative to its peers in the Moderate Allocation category, earning it the second-lowest Morningstar Sustainability Rating of 2 globes. Investors concerned about ESG risk may be better off with funds earning 4 or 5 globes, as they tend to hold securities less exposed to ESG risk. ESG risk measures the degree to which material environmental, social, and governance issues, such as climate change and inequalities, could affect valuations. ESG risk differs from impact, which is about driving positive environmental and social outcomes for society’s benefit.
One potential issue for a sustainability-focused investor is that Northern Global Tactical Asset Allc Fund doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes.
Northern Global Tactical Asset Allc Fund has a Carbon Risk Score of 9.80, indicating portfolio companies face low carbon-related risks in the transition to a low-carbon economy. The fund's current involvement in fossil fuels rests at 10.25%, which compares favorably with 10.34% for its average category peer. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas.
The fund exhibits moderate exposure (6.54%) to companies with high or severe controversies. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that may negatively affect stakeholders, the environment, or the company’s operations.