United Nations Sustainable Fund Awards

Sustainable equity funds, which integrate ESG, climate change and sustainable development consideration into their asset allocation process, plays an important role in channeling investment in sectors that are critical for achieving the Sustainable Development Goals (SDGs), such as green energy, sustainable infrastructure, agriculture, health and education. It is estimated that there are more than 7,000 sustainable funds globally, with $2.5 trillion of assets under management.

However, the global sustainable fund market faces credibility issues and concerns related to “sustainability washing” due to a lack of transparency and standards. Moreover, many of these funds are not invested in developing economies, where sustainable development investments are most needed.

To promote the development of high-quality, impactful sustainable funds, especially those investing in SDG-related sectors and in developing countries, the UN Sustainable Fund Award recognizes the best-performing sustainable funds that demonstrate a high level of sustainability and impact while outperforming their financial benchmarks.

United Nations Sustainable Fund Awards 2023

About

  • The 2023 United Nations Sustainable Fund Award, with a theme on climate investment, recognizes the achievements and impact of global equity funds dedicated to investing in climate mitigation and environment protection. Four winners were awarded.

The Awards were announced at a ceremony at the UNCTAD World Investment Forum on 17 October 2023 in Abu Dhabi, the UAE.

Winners

Four winners were awarded:

Fondita Sustainable Europe B

The fund scored maximum points for its ESG consensus rating (30/30), with no known exposure to sensitive issues or sectors. Its climate sustainability score was high due to a relatively large exposure of the fund’s portfolio to climate positive assets (60%) and no negative climate impact factors. The fund scored very highly on its sustainability disclosure performance both at the product and company levels (28/30).

Green Benefit Global Impact Fund

The fund scored maximum points for its ESG consensus rating (30/30), with no known exposure to sensitive issues or sectors. Its climate sustainability score was exceptionally high due to the large exposure of the fund’s portfolio to climate positive assets (87%) and no negative climate impact factors. The fund scored relatively highly on its sustainability disclosure performance both at the product and company levels (19/30).

Montpensier Finance M Climate Solutions C

The fund scored maximum points for its ESG consensus rating (30/30), with no known exposure to sensitive issues or sectors. Its climate sustainability score was very high due to the large exposure of the fund’s portfolio to climate positive assets (70%) and no negative climate impact factors. The fund scored very highly on its sustainability disclosure performance both at the product and company levels (25/30).

Penghua Environmental Protection Industry Investment Fund

The fund scored maximum points for its ESG consensus rating (30/30), with no known exposure to sensitive issues or sectors. Its climate sustainability score was exceptionally high due to the large exposure of the fund’s portfolio to climate positive assets (87%) and no negative climate impact factors. The fund scored better on its sustainability disclosure performance at the company level than the product level (15/30).

Concept Note

Click here to download the concept note

Short-listed funds for the Awards

 

United Nations Sustainable Fund Awards 2021

About

The 2021 Awards have two categories:

  • The 2021 United Nations Sustainable Global Fund Award is dedicated to sustainable equity mutual funds, which represent the largest share of the sustainable fund universe by both number of funds and assets under management. Four winners were awarded.
  • The 2021 United Nations Sustainable Emerging Market Fund Awards recognizes the achievements and impact of sustainable equity funds that invest (solely or mainly) in emerging markets. Two winners were awarded.

The Awards were announced at an online awards ceremony at the UNCTAD WorldInvestment Forum on 20 October 2021.

Winners

The 2021 United Nations Sustainable Global Fund Award is dedicated to sustainable equity funds, which represent the largest share of the sustainable fund universe by both number of funds and assets under management. Four winners were awarded:

  • Aegon Global Sustainable Equity Fund
  • Baillie Gifford Positive Change Equities Fund
  • New Alternatives Fund A
  • Swisscanto (LU) Equity Fund Sustainable Global Climate

The 2021 United Nations Sustainable Emerging Market Fund Award recognizes the achievements and impact of sustainable equity funds that invest (solely or mainly) in emerging markets. Two winners were awarded:

  • Matthews Asia ESG Fund
  • Stewart Investors Global Emerging Markets Sustainability Fund
NOTE
Evaluation of funds was based on five sustainability indicators of their holdings: 1. ESG rating at the portfolio level, which is provided by Conser based on its multisource ESG Consensus® rating, with its methodology and process audited by PwC; 2. SDG alignment; 3. net impact on climate; 4. relative performance; and 5. investment performance resilience. Technical support was provided by Anglo-Swiss Advisors on the analysis of the financial performance of the funds. For details, please refer to Methodology below.

Click here to download the 2021 United Nations Sustainable Fund Awards and the 2021 United Nations Sustainable Fund Awards “Short List”

Selection Committee

  • Ms. Xiaolan Fu, Director, Technology and Management Centre for Development, University of Oxford
  • Mr. Manuel Leuthold, Chairman, Compenswiss (Fonds de compensation)
  • Ms. Fiona Reynolds, CEO, Principles for Responsible Investment (PRI)
  • Ms. Lisa Sachs, Director, Columbia Center on Sustainable Investment, Columbia University
  • Ms. Nandini Sukumar, CEO, World Federation of Exchanges (WFE)
  • Mr. James Zhan, Director, Division on Investment and Enterprise, UNCTAD
  • Mr. Laurent Zylberberg, Chairman, European Long-Term Investors Association

Methodology

Eligibility criteria

1.Sustainable Global Fund Award

All sustainable equity mutual funds (excluding ETFs) that report a systematic adoption of ESG or SDG factors in their asset selection process, in their prospectus or other documents, were eligible for the long list for the Sustainable Global Fund Award, if they met the following criteria as of 30 June 2020:

  • They had a 3-year performance history;
  • They had minimum assets of $20 million, and
  • Their holdings were accessible on leading global fund databases, with a
    maximum delay of three months.
2. Sustainable Emerging Market Fund Award

 

All sustainable equity mutual funds (excluding ETFs) that invest solely or mainly (over 70% of their assets) in developing markets were eligible for the Sustainable Emerging MarketFund Awards, if they met the following criteria as of 30 June 2020:

  • They have a 3-year performance history;
  • They have minimum assets of $10 million, and
  • Their holdings are accessible on leading global fund databases.

Selection process

1. The Sustainable Global Fund Award

Prescreening and the long list

Based on their holdings as of 30 June 2020, UNCTAD, supported by independent experts, analyzed the sustainability and financial performance of all eligible funds, and a weighted sustainability score was given to each of them, based on five indicators: ESG rating at the portfolio level (40%), SDG alignment (15%), net impact on climate (15%), relative performance (15%), and investment performance resilience (15%) (as defined below). The top 100 sustainable funds with the highest scores were long-listed for the Global Sustainable Fund Award.

ESG rating Numeric rating from 10 to 1 (best to worst) based on the ESG score provided by Conser, a Swiss independent ESG expert. The multi-source approach developed by Conser with its ESG Consensus® is selected due to enhanced comparability of ESG data and mitigated analytical bias that otherwise could be associated with the use of a unique source of ESG rating. The Conser Consensus methodology and process were audited by PWC.
Net impact on climate % of assets in clean tech minus % of assets in fossil fuels.
SDG alignment % of assets invested in 8 SDG sectors, i.e. water and sanitation transport infrastructure, telecommunication infrastructure, health, food and agriculture, education, ecosystem diversity, and climate change mitigation (renewable energy).
Relative performance Relative financial performance against the respective benchmark.
Investment performance resilience Measured by the upside/downside capture ratio of the fund.

The short list or the nominees for the Sustainable Fund Awards

In order to ensure consistent outperformance, UNCTAD rated all long-listed funds, based on their holdings as of 31 March 2021, with the same methodology mentioned above. The top 20 funds with the highest average of the 2020 and 2021 sustainability scores were short listed for the award.

2. Sustainable Emerging Market Fund Award

Due to limited data availability of emerging market sustainable funds, especially those domiciled in developing economies, eligible funds for the Sustainable Emerging Market Fund Award were rated by their latest available holdings, with the same methodology
described above for both the long lists. Ten funds with the highest sustainability score were short listed for the Awards.

3. Preconditions for qualifying for the short list

For a fund to be qualified for the short lists for the two award categories, it must meet the following conditions with respect to its holdings:

  • An ESG rating of 6 and above.
    Outperforming its respective benchmark in returns.
  • Zero exposure to weapons (including cluster bombs), gambling, pornography,
    tobacco and alcohol.
  • An exposure to international norm-related risks of less than 0.5% of its holdings.

In addition, any funds with any material sustainability concerns or governance issues identified by UNCTAD in its due diligence review (see section IV), with respect to its provider, will be excluded from the short list.

4. The Award Selection Committee and the selection of the winners

An Award Selection Committee comprised of 7 international experts was established to review the short-listed funds and decide the winners by voting. The Committee was chaired by an UNCTAD senior official and included six international experts with proven expertise in the field of sustainable finance, with due consideration given to geographic and gender balance. The committee cannot have more than one member from the same organisation/body/company.

Each committee member voted for 4 funds for the Sustainable Global Fund Award, and 2 funds for the Sustainable Emerging Market Fund Award. The top 4 and top 2 funds were the winners of each Award.

The members of the Committee acted in their own name, with complete impartiality,objectivity and independence. Each Member had equal weight in the decisions taken. The Chair of the Committee ensured proper debate and voting process and compliance with the rules.

Each member undertakes to disclose in advance any mandate and/or contractual or other relationship with the provider of a short-listed fund(s) that could result in a potential conflict of interest, and has a duty to abstain from voting for the fund(s).

Due diligence

UNCTAD conducted due diligence on all short-listed funds for both awards. Any serious ESG concerns identified will lead to exclusion of a fund from nomination. In particular, the due
diligence looked into the following issues:

  • Whether the portfolio of the fund on 30 June 2020 and 31 March 2021 was exposed to any material sustainability concerns or controversial issues.
  • Whether there is any reputation or governance concern with respect to the fund’s provider, its management and investment practices (any fraud, legal action, etc.).
  • Whether the fund has a good track record of transparency in terms of disclosing its holdings, sustainable investment strategies and practices and impact in a timely manner.

Click here to download the methodology

 

Video and Press Release

Press release “UN awards world’s best sustainable funds, launches global observatory for sustainable finance”