Solution Companies and Storebrand's Sustainability Score

«Solution Companies»

Storebrand operates with a solutions company whitelist which consists of companies that significantly contribute to sustainable development without causing substantial harm to environment or society.

Examples are companies whose key business is centered around investment themes like renewable energy, technologies for sustainable city development, circular economy and recycling, electric public transport, water management, energy efficiency, sustainable materials and technology, responsible consumption and production, empowerment through access to health services and financial services in emerging markets.

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Storebrand's Sustainability Score

Storebrand Asset Management has a strong focus on Sustainable Investment and a 25-year history of using sustainability data to inform investment decisions. We fundamentally believe that investing in companies well positioned to deliver on the UN's Sustainable Development Goals (SDGs), will deliver better risk-adjusted long-term returns for our clients.

Since 1997, Storebrand has utilised an in-house Sustainability Score as an investment support tool. Since inception, we have improved the score incrementally, in line with better ESG data access, and changes in perceptions on the role of sustainability issues in investments. We use the Storebrand Sustainability Score, and other qualitative information, to give portfolio managers a better understanding of portfolio companies' performance on sustainability. In addition, the score is used to optimize portfolios towards better performing companies and to calculate an internal fund rating.

We calculate the Sustainability Score on over 4500 companies and base it on a 0-100 scale. It is comprised of two main building blocks, ESG risks and SDG opportunities. On the ESG risk side, the score assesses companies' exposure to, and management of, financially material sustainability risks. On the SDG opportunities side, we analyse sustainability data sources, to find companies whose products and services contribute positively to the achievement of financially relevant SDGs. For products and services, we source FTSE Russel Green Revenue data, in addition to internal research, to identify solutions companies. The SDG opportunities section of the score also has a company operations dimension, particularly related to Gender Equality.

Fund Managers at Storebrand Asset Management are able to access the score on a number of levels. Total Score, Risk Score, SDG Score, and scores for underlying themes within these building blocks, are all readily available. The data sources underpinning the scores are external sources from quality controlled data providers, coupled with internal research. The following providers are currently in use:

  • ESG Risks: Sustainalytics ESG Risk Rating (50%)
  • SDG Opportunities - Products & Services: FTSE Russell Green Revenue Streams plus internal research (40%)
  • SDG Opportunities - Operations: Equileap data on Gender Equality (10%)

The Sustainability Score is relevant across asset classes. Implementation of the score is dependent on the style and risk profile of the fund/portfolio in question.


Our Fund Sustainability Score, ranging from 1-10, is based on an underlying Company Sustainability Score.
SustainabilityScore

A fund having performed well in the past is no guarantee for future returns. Other factors with an impact on how a fund may perform in the future include market developments, the fund manager's performance, the fund's risk profile, and management fees. When the shares a fund is invested in decline in value, it may lead to negative returns.