SEB Global Sustainable Companies Fund

An Article 9 fund, as defined by the EU SFDR regulation, is a fund whose investments have sustainability as their objective. In addition, Article 9 funds, also known as “dark green funds”, are subject to stricter transparency and reporting requirements to ensure that their sustainability goals are met. This makes the funds important tools for investors seeking to contribute to sustainable development. 

Article 8 funds, also known as "light green funds”, promote sustainability in their investments but do not have sustainability as their primary objective. Article 9 funds go a step further by explicitly focusing on achieving various sustainability goals.

While many sustainable global funds on the market today focus on specific themes such as renewable energy, gender equality, clean water, the SEB Global Sustainable Companies Fund provides you as an investor with a broad exposure to developed markets worldwide, considering both environmental and social sustainability. The fund does not invest in emerging markets.

SEB Global Sustainable Companies also aims to reflect its benchmark index in terms of performance and risk profile. However, it deviates from the index when it comes to the selection of investments and the number of holdings in the portfolio, which is due to the fund's inclusion and exclusion criteria based on sustainability.

The fund uses a model based on different parameters and rules to drive investment decisions. Companies are selected based on mathematical models and statistical relationships to generate the return and risk profile in line with the fund's benchmark index.

Article 9 funds consist of sustainable investments, which are investments contributing to an environmental or social sustainability goal. These investments must not cause significant harm to any other environmental or social sustainability objectives, and the companies must demonstrate good corporate governance. 

SEB Investment Management AB has developed its own analysis model, SIMS-S, which utilises various external and internal data sources to provide a sustainability rating for each potential investment. The rating considers factors such as risks, negative consequences, opportunities, alignment with global sustainability goals, carbon footprint, and more.
This sustainability analysis focuses on specific sector risks, the sustainability of products and services, and the long-term impact on sustainable value creation. The aim of SIMS-S is to provide a relevant, material, and forward-looking rating for each company.

Watch the video "SEB's fund company's sustainability score model"

The investment decisions are based on an optimised model, incorporating selected parameters that drive the investment decisions to generate the risk and return profile of the benchmark index. The investable universe consists of approximately 1,300 sustainable companies. By investing in approximately 300–700 of these, the fund can replicate the index’s distribution across countries, regions, and sectors while adhering to a rule-based approach.

The fund considers the principal adverse impacts by excluding investments in specific companies or sectors. By excluding investments in companies that exhibit these negative impacts, the fund strives to minimise its negative impact on the environment and society. 

The fund considers the following negative impacts 1-14 along with two voluntary negative impacts through exclusions and the SIMS-S sustainability model,: 

1. Greenhouse gas emissions.
2. Carbon footprint.
3. GHG intensity of investee companies.
4. Exposure to companies active in the fossil fuel sector.
5. Share of non-renewable energy consumption and production.
6. Energy consumption intensity per high-impact climate sector.
7. Activities negatively affecting biodiversity-sensitive areas.
8. Emissions to water.
9. Hazardous waste and radioactive waste ratio.
10. Violations of UN Global Compact principles and Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises.
11. Lack of processes and compliance mechanisms to monitor compliance with UN Global Compact principles and OECD Guidelines for Multinational Enterprises.
12. Unadjusted gender pay gap.
13.  Board gender diversity.
14. Exposure to controversial weapons (e.g. anti-personnel mines, cluster munitions, chemical weapons and biological weapons).

Voluntary: Investments in companies without carbon emission reduction initiatives.
Voluntary: Lack of a supplier code of conduct.

When deciding whether to invest in the fund, consider not only its sustainability-related characteristics but also all other characteristics described in the information brochure.

Tracking error is a measure of how much a fund's return deviates from its benchmark index. This fund is expected to have a tracking error of less than 3 per cent (<3%), which means that:

1. It closely follows its benchmark index.
2. There is only a minor difference between the fund's return and the expected return of its benchmark index's.