M&G enhances the ESG characteristics of multiple equity funds as they transition to SFDR Article 8

14 September 2022

London, 12/09/2022 – M&G today announces its plan to enhance the ESG characteristics of 10 Funds in the firm’s Equity range, as part of its wider commitment to evolve strategies towards ESG, sustainable or impact outcomes. Once these changes take effect, 9 of the strategies will be recategorised as Article 8 under SFDR.

The 9 Funds transitioning to Article 8* will follow a positive ESG tilt approach, delivering investors a weighted average ESG rating that is higher than that of the Fund’s benchmark or equivalent to at least MSCI A rating1. The changes will also introduce a set of ESG exclusions based on specific norm-based, sector-based and/or values-based exclusions, restricting the Funds’ ability to invest in companies involved in tobacco, adult entertainment, gambling, controversial weapons or Arctic drilling & oil sands extraction in addition to their existing restrictions on investing in thermal coal2 . These restrictions also include companies that are assessed to be in breach of the United Nations Global Compact principles. All the Funds’ financial objectives will remain the same, and their benchmarks will be unchanged.

Finally, the ESG characteristics of the SFDR Article 8 M&G (Lux) Global Themes Fund will be enhanced further from 10 November 2022, with a positive ESG tilt and amended exclusions criteria.

Fabiana Fedeli, Chief Investment Officer, Equities and Multi Asset at M&G, says: “As stewards of our clients’ money, we believe that long-term investment returns are underpinned by good governance and sustainable business models. The changes we are announcing today will further promote social, governance and environmental factors into our investment decision making processes, while considering the sustainability preferences voiced by our clients.”

Micaela Forelli, Managing Director Europe at M&G, adds: “These changes evidence the commitment we made to expand our range of ESG, sustainable and impact orientated funds for investors, in addition to providing our clients with greater clarity on the ESG outcomes we seek to deliver. Once these changes come into effect, over 60% of our total wholesale SICAV assets under management will be classified Article 8 or 9 under SFDR.”

Source: M&G