About Sustainable Investing

At Northern Trust Asset Management (NTAM), we define Sustainable Investing as encompassing all of NTAM’s investment strategies and accounts that utilize values based and norms based screens, best-in-class and Environmental, Social & Governance (ESG) integration, or thematic investing that may focus on a specific ESG issue such as climate risk. NTAM’s Sustainable Investing includes portfolios designed by NTAM as well as those portfolios managed to client-defined methodologies or screens. As the data, analytical models and aforementioned portfolio construction tools available in the marketplace have evolved over time, so too has NTAM. NTAM’s Sustainable Investing encompasses strategies and client assets managed in accordance with client specified responsible investing terms (historically referred to as Socially Responsible), as well as portfolios that leverage contemporary approaches and datasets, including ESG analytics and ESG thematic investing.

ESG Investing Risk is the risk stemming from the ESG factors that the Fund applies in selecting securities. The use of ESG factors in securities selection may affect the Fund’s exposure to certain companies or industries and cause the Fund to forego certain investment opportunities. The Fund’s performance results may be lower than the broader equity market or than other funds that do or do not use ESG factors, scores, or screens in their securities selection process, or use a different ESG methodology. Information used by the Fund to evaluate ESG factors, including data provided by the Fund’s third-party vendor, may not be readily available, complete or accurate, which could negatively impact the Fund’s ability to accurately determine companies’ ESG ratings, which in turn could negatively impact the Fund’s performance. Currently, there is a lack of common industry standards relating to the development and application of ESG criteria which may make it difficult to compare the Fund’s principal investment strategies with the investment strategies of other funds that apply certain ESG criteria or that use a different third-party vendor for ESG data.

The Fund’s assessment of a company, based on the company’s level of involvement in a particular industry or ESG controversy or the company’s ESG ranking or rating, may differ from that of other funds or an investor. Information used by the Fund to evaluate ESG factors may vary across providers and issuers as ESG is not a uniformly defined characteristic. ESG standards differ by region and industry, and a company’s ESG practices or data providers’ assessment of a company’s ESG practices may change over time. As a result, the companies in which the Fund invests may not reflect the beliefs and values of any particular investor and may not be deemed to exhibit positive or favorable ESG characteristics if different metrics were used to evaluate them. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the Fund’s ability to invest in accordance with its investment policies and/or achieve its investment objective. 

About the Rankings and Awards shown above.
Past performance is not indicative of future results.

¹ Source: eVestment. Data as of 6-30-2023. Universe for comparison consists of 138 total passive equity products within “All ESG Universe.”

² As of 3-31-2024.

³2023 Best of the Best Awards — Asia Asset Management announced the winners of the “2023 Best of the Best Awards” in January 2023. Asia Asset Management, an industry magazine for asset managers, pensions and institutional investors in Asia, recognizes outstanding companies involved in asset management and pensions in Asia. There are four categories: performance, country, regional and ASEAN. Performance is selected by quantitative evaluation by period, and others by both quantitative and qualitative evaluation methods. NTAM was awarded the regional awards for Best Application of ESG, Best Institution for Diversity, Equity and Inclusion, and Best Smart Beta Strategy. Best Application of ESG was awarded based on the integration of firm ESG policies and strategies and the research methodology used. Best Institution for Diversity, Equity and Inclusion was awarded based on our firm’s positioning within DEI, achievements to date and plans for the future. Best Smart Beta Strategy was awarded based on how strategies are put together (transparent construction, diversification, and low cost) and how they have performed over the past three years.

⁴Best-in-class ESG is industry terminology referring to an investment approach that selects companies that are leaders in implementing ESG.

For Institutional Investor Use Only

Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, Northern Trust Asset Management Australia Pty Ltd, and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.