Praxis International Index Fund has a number of positive attributes that may appeal to sustainability-focused investors.
This strategy has an above-average Morningstar Sustainability Rating of 4 globes, indicating that the ESG risk of holdings in its portfolio is relatively low compared with those of its peers in the Global Equity Large Cap category. 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.
Praxis International Index Fund has a sustainability or ESG-focused mandate. Funds with an ESG-focused mandate are more likely to align with the expectations of an investor who cares about sustainability issues. Praxis International Index Fund has a Carbon Risk Score of 7.41, 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 9.23%, which compares favorably with 10.50% for its average category peer. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas. Praxis International Index Fund shows 8.52% involvement in carbon solutions. This percentage surpasses the 7.69% average involvement of its peers in the Foreign Large Blend 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 small arms. Yet this goal is far from achieved, as the fund exhibits 0.2% exposure to controversial weapons. This compares with 1.02% for its average peer in the Global Equity Large Cap category.
The fund exhibits moderate exposure (3.32%) 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.