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Columbia Convertible Securities C PHIKX Sustainability

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Sustainability Analysis

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Sustainability Summary

Columbia Convertible Securities Fund has a number of attributes that may meet the expectations of sustainability-focused investors, despite some issues worthy of attention.

This fund lands in the 10% of strategies with the highest ESG risk in the Convertibles category, earning it the lowest Morningstar Sustainability Rating of 1 globe. Funds with 4 or 5 globes tend to hold securities that are less exposed to ESG risk. 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.

One potential issue for a sustainability-focused investor is that Columbia Convertible Securities Fund doesn’t have an ESG-focused mandate. A fund with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes.

One key area of strength for Columbia Convertible Securities Fund is its low Morningstar Portfolio Carbon Risk Score of 8.93 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy.

The fund has a modest level of exposure (3.16%) 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