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Hartford Schroders Emerging Mkts Eq I SEMNX Sustainability

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Sustainability Analysis

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Sustainability Summary

Hartford Schroders EmMkts Equity Fd has several promising attributes that may appeal to sustainability-focused investors.

This fund has relatively low exposure to ESG risk compared with its peers in the Global Emerging Markets Equity 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.

One key area of strength for Hartford Schroders EmMkts Equity Fd is its low Morningstar Portfolio Carbon Risk Score of 9.64 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. By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with controversial weapons and thermal coal. The fund fulfills this goal by having negligible investment exposure to each of these activities.

One potential issue for a sustainability-focused investor is that Hartford Schroders EmMkts Equity Fd doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes. The fund has significant exposure (12.10%) to companies with high or severe controversies. Companies with controversies may be involved in incidents such as corruption, employee abuses, environmental incidents, and corporate scandals 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. Such controversies can also damage the reputation of both companies themselves and their shareholders.

ESG Commitment Level Asset Manager