The ESG risk of Fisher IIG US Lrg Cp Eq Env & Scl Val Fd's holdings is comparable to its peers in the US Equity Large Cap Growth category, thus earning an average Morningstar Sustainability Rating of 3 globes. Funds in the same category rated 4 or 5 globes 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, 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.
Based on its latest prospectus, sustainability or ESG factors are a focus in the investment process of Fisher IIG US Lrg Cp Eq Env & Scl Val Fd. Funds with ESG-focused mandates are more likely to deliver positive sustainability outcomes. Fisher IIG US Lrg Cp Eq Env & Scl Val Fd has an asset-weighted Carbon Risk Score of 6.3, indicating that its companies have low exposure to carbon-related risks. These are risks associated with the transition to a low-carbon economy such as increased regulation, changing consumer preferences, technological advancements, and stranded assets. Fisher Iig Us Lrg Cp Eq Env & Scl Val Fd shows 22.2% involvement in carbon solutions. This percentage is high in absolute terms and surpasses the 15.0% average involvement of its peers in the Large Growth category. Carbon solutions include products and services related to renewable energy, energy efficiency, green buildings, green transportation, and so on. By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with controversial weapons, tobacco, and and small arms. The fund fulfills this goal by having negligible investment exposure to each of these activities.
The fund aims to avoid, or limit exposure to, companies in violation with international norms, such as the UN Global Compact or the Universal Declaration of Human Rights.
Currently, the fund has 6.8% involvement in fossil fuels, surpassing 3.1% for the average peer in its category. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas.
The fund has a modest level of exposure (8.57%) 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.