The fund has the lowest Morningstar Sustainability Rating of 1 globe, indicating that the ESG risk of holdings in its portfolio is rather high compared to those of its peers in the US Equity Large Cap Growth category. Investors concerned about ESG risk may be better off with funds earning 4 or 5 globes, as they hold securities less exposed to ESG risk. Unlike impact, which focuses on generating positive environmental and societal outcomes, ESG risk measures the degree to which investments could be affected by material ESG issues like climate change and inequalities.
One potential issue for a sustainability-focused investor is that Delaware Ivy Accumulative Fund doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes.
One key area of strength for Delaware Ivy Accumulative Fund is its low Morningstar Portfolio Carbon Risk Score of 5.66 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. The fund is therefore well positioned to transition to a low-carbon economy. Currently, the fund's involvement in fossil fuels is negligible, and compares favorably with 3.42% for its average peer.
The fund exhibits moderate exposure (5.26%) 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.