Refinitiv Lipper unveils ESG fund scores

Combining Lipper's coverage of fund universe with Refinitiv's proprietary scoring methodology

Lipper has rolled out its Refinitiv Lipper Funds ESG Scores covering 19,000 portfolios representing $15.7trn in total net assets

The move is aimed at supporting the transition to a sustainable economy by providing comparisons at the fund level for fund managers, advisors and investors.

Using the Lipper’s overall coverage of the 330,000 funds/share classes and their holdings, coverage of over 9,000 companies (representing over 80% of global market capitalisation) and Refinitiv’s proprietary scoring methodology, which factors in issues such as materiality and transparency stimulation, the newly combined group has created fund scores for 19,000 portfolios investing in equity, bonds and mixed assets.

See also: – ESG Clarity debuts the Responsibility Ratings Index

Refinitiv Lipper Fund ESG Scores measure performance, commitment and effectiveness across 10 main themes (emissions, environmental product innovation, diversity and inclusion, human rights, shareholders, etc.) The themes are scored on three individual pillars environmental, social and governance (ESG) based on publicly-reported data

The methodology grades funds on a 100-point scale based on the ESG rankings of the underlying portfolio holdings and are recalculated monthly as updated portfolio holdings are made available. To qualify, funds must have ESG scores on at least 70% of its holdings.

David Craig, CEO of Refinitiv, said: “As the world addresses the challenges of Covid-19, climate change remains the largest global issue impact communities, food supplies, biodiversity and economies. It has become an imperative for financial markets to address, allowing investors to direct funds to transitionary projects and away from high carbon and carbon equivalent industries, and more and more meeting new regulatory mandates. Sustainable finance isn’t just a political or social choice — it’s the smartest business decision. Refinitiv is proud to play our part in encouraging this industry transition by providing trusted data and analytics for investors, traders and advisors evaluating ESG performance and in allocating capital.”

“The ESG scores are a uniquely effective way to assess performance across industries, factoring in issues such as materiality and transparency stimulation, and serve as an objective and impartial assessment of the importance of each ESG theme to different industries,” added Craig. 

Earlier this year, Refinitiv announced enhancements to its ESG Scoring Methodology to reflect sustainable industry developments and market changes.  In 2019, Refinitiv brought together its ESG Sustainable Investing and Lipper Fund Ratings businesses to increase focus on unearthing links between sustainable business strategies and financial performance.   

The Refinitiv Lipper Fund ESG Scores are available on Refinitiv Workspace, Eikon or API Feed.


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...