Calvert Equity Fund has a number of positive attributes that may appeal to sustainability-focused investors.
This strategy holds securities with low exposure to ESG risk relative to those of its peers in the Morningstar US Equity Large Cap Growth category, earning it the highest Morningstar Sustainability Rating of 5 globes. ESG risk measures the degree to which material environmental, social, and governance issues, such as climate change and inequalities, could affect valuations. ESG risk differs from impact, which is about driving positive environmental and social outcomes for society’s benefit.
Calvert Equity Fund holds itself out to be a sustainable or ESG-focused investment. In other words, ESG concerns are central to the investment process of this strategy. A fund with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes. One key area of strength for Calvert Equity Fund is its low Morningstar Portfolio Carbon Risk Score of 3.29 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy. Currently, the fund's involvement in fossil fuels is negligible, and compares favorably with 3.37% for its average peer.
By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with controversial weapons, tobacco, and small arms. The fund fulfills this goal as its investment exposure to each of these activities is negligible. The fund aims to avoid or minimize holdings in companies breaching international norms, including the UN Global Compact or the Universal Declaration of Human Rights.
Carbon solutions compose 0.95% of Calvert Equity Fund's assets. This percentage lags behind its average peer in the Large Growth category, whose Carbon Solutions Involvement averages 12.17%. Carbon solutions include products and services related to renewable energy, energy efficiency, green buildings, green transportation, and so on. The fund has relatively high exposure (9.16%) to companies with high or severe controversies. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that may negatively affect stakeholders, the environment, or the company’s operations.