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Pear Tree Polaris Foreign Value Instl QFVIX Sustainability

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Sustainability Analysis

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Sustainability Summary

Pear Tree Polaris Foreign Value Fund has several promising attributes that may appeal to sustainability-focused investors.

Pear Tree Polaris Foreign Value Fund has an average Morningstar Sustainability Rating of 3 globes, indicating that the ESG risk of holdings in its portfolio is similar to that of its peers in the Global Equity Large Cap category. Funds with 4 or 5 globes tend to hold securities that are 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.

One key area of strength for Pear Tree Polaris Foreign Value Fund is its low Morningstar Portfolio Carbon Risk Score of 9.70 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.

One potential issue for a sustainability-focused investor is that Pear Tree Polaris Foreign Value 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.

The fund has a modest level of exposure (2.50%) 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