Skip to Content

Lazard US Small Cap Equity Select Instl LZSCX Sustainability

| Medalist Rating as of | See Lazard Investment Hub

Sustainability Analysis

Author Image

Sustainability Summary

Lazard US Small Cap Equity Sel Portfolio has a number of attributes that may meet the expectations of sustainability-focused investors, despite some issues worthy of attention.

This fund has relatively low exposure to ESG risk compared with its peers in the US Equity Small Cap 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.

No companies held by Lazard US Small Cap Equity Sel Portfolio are recognized as being involved in controversies at a high or severe level. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that have a negative impact on stakeholders or the environment, which create some degree of financial risk for the company. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. In addition, they can damage the reputation of both companies themselves and their shareholders.

One potential issue for a sustainability-focused investor is that Lazard US Small Cap Equity Sel Portfolio doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes.

Lazard US Small Cap Equity Sel Portfolio has a 12-month asset-weighted Carbon Risk Score of 12.0. This is situated at the lower end of the medium carbon risk band, suggesting that its portfolio holdings are not among the worst-positioned to transition to a low-carbon economy, but they are not among the best-positioned either. Investors concerned about the transition risks may prefer to consider funds with negligible or low carbon risk. Such funds invest in companies that tend to operate in sectors less exposed to the transition (such as healthcare and IT) and/or companies in more carbon-intensive sectors (such as industrials and utilities) but that consider climate change in their business strategy and products, and therefore are positively aligned with the transition. Currently, the fund has 8.7% involvement in fossil fuels, which is roughly in line with 7.9% for its average category peer. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas.

ESG Commitment Level Asset Manager