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JPMorgan SmartRetirement® 2030 R2 JSMZX Sustainability

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Sustainability Analysis

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Sustainability Summary

JPMorgan SmartRetirement ® 2030 Fund may not appeal to sustainability-conscious investors.

JPMorgan SmartRetirement® 2030 Fund's holdings are exposed to average levels of ESG risk relative to those of its peers in the Target Date category, thus earning it an average Morningstar Sustainability Rating of 3 globes. Competing funds in the category with ratings of 4 or 5 globes have less ESG risk in their holdings. 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.

JPMorgan SmartRetirement® 2030 Fund has an asset-weighted Carbon Risk Score of 7.5, 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.

One potential issue for a sustainability-focused investor is that JPMorgan SmartRetirement® 2030 Fund doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes.

Currently, the fund has 8.9% involvement in fossil fuels, which is roughly in line with 9.5% 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 has a modest level of exposure (7.94%) 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