Schroders’ sustainable investing models

SustainEx™ estimates the net costs or benefits that a company or country creates for society, expressed as a percentage of company sales or a country’s GDP. In other words, if a company or country were presented with a year-end bill or credit reflecting its net impact on society, SustainEx™ estimates what that figure would be. These externalities range from the benefits brought from innovation, sanitation and avoided carbon emissions to the costs from nuclear waste, alcohol and corruption.

Building on our flagship proprietary model - SustainEx™,  NatCapEx quantifies both negative and positive externalities, with a specific focus on corporate impacts on nature and ecosystems, and how management actions and products mitigate them. As with SustainEx™, it captures impacts not yet priced by society. The model highlights natural capital hotspots at both company and portfolio level, helping us target engagement where it can make the greatest difference. 

CONTEXT provides structured, logical, and wide-ranging data to support our analysts' views. It uses a selection of data to assess a company's relationship with its stakeholders such as customers, suppliers, regulators and employees. This tool is interactive and customisable, enabling our investment analysts to select and weigh material sustainability trends for each sector and select the most relevant metrics for assessment in any given case. 

Our Climate Transition Model provides a holistic view of how companies and portfolios align with the global transition to a low-carbon economy. The model assesses company alignment across three key pillars of ambition towards net zero, credibility in their transition actions and actual progress towards net zero. It goes beyond just looking at company commitments, incorporating factors like changes in grid intensity due to a shifting energy mix to determine the extent of the free ride effect from reductions in Scope 2 emissions as regions transition to greener energy sources.  

Building on BlueOrchard’s renowned B.ImpactTM framework, our Impact Framework enables us to assess impact and monitor impact progress over time for our investments. Every company and asset within our impact portfolios across both public and private assets is assessed through our proprietary impact scorecard.