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Calvert Ultra-Short Duration Income A CULAX Sustainability

| Analyst rating as of

Sustainability Analysis

Sustainable Summary

Sustainability Summary is not assigned to this investment.

Morningstar generates quantitatively driven content that covers the Environmental, Social, and Governance (ESG) characteristics for managed investments that have both a Morningstar Sustainability Rating and a Carbon Risk Score, called the Sustainability Strategy Summary. This share class’ Sustainability Summary content was not generated because of insufficient data. To generate individualized content, the Sustainability Summary requires sufficient data to create its framework of “mental models” designed to mimic content written by analysts. The Sustainability Strategy Summary uses an algorithm designed to predict the ESG analysis that analysts would produce on the investment product if they covered it.

ESG Commitment Level Asset Manager

| Basic

Morgan Stanley Investment Management has followed Calvert’s lead by strengthening its policies on environmental, social, and governance issues and expanding its ESG offerings, but the lack of an overarching ESG philosophy across its lineup holds it back. It maintains a Morningstar ESG Commitment Level of Basic. In March 2021, Morgan Stanley acquired Eaton Vance, at which point Calvert became a wholly owned subsidiary of MSIM. Calvert maintains an independent board to ensure rigorous ESG integration in all Calvert-branded funds, but the firms are increasingly merging, especially in terms of resources. Emily Chew left MSIM to become the chief responsibility officer of Calvert in May 2021, and Ted Eliopoulos moved from MSIM to succeed John Streur as CEO of Calvert in December 2022. Despite changes in leadership, the acquisition has not upended Calvert’s innovation and merit within sustainable investing. Calvert has led the field since the 1980s when it launched the Calvert Social Investment Fund, proposed its first socially driven shareholder resolution, and helped champion the foundation of Ceres, a network of investors and organizations that advocates for policy changes to accelerate the climate transition, among other sustainability issues. Calvert continues to build on this legacy through independent fund oversight and cutting-edge investment stewardship (including proxy voting and engagement). Calvert’s excellence in sustainable investing has provided a blueprint for MSIM’s own progress in the field, but MSIM has a long road ahead to catch up. Beginning in 2021, MSIM updated its sustainable-investing principles and developed ex-ante portfolio modelling of ESG risks in its proprietary database. In 2022, the firm launched a suite of co-branded MSIM-Calvert sustainable funds in Europe, which introduced Calvert’s proprietary research to overseas markets. Still, outside of ESG-branded funds, the incorporation of ESG risks is left to the discretion of portfolio managers, leading to inconsistent firmwide adoption. The firm’s ESG efforts are well supported by a dedicated central team and ESG specialists on individual investment teams. Navindu Katugampola replaced Emily Chew as global head of sustainability in May 2021 with oversight of four verticals: policy, product development, stewardship, and data. Although the core ESG crew is small relative to peers, its access to Calvert’s expertise is a key advantage, especially regarding access to third-party data sources and proprietary research. MSIM’s active ownership capabilities still have room to grow. The guidelines for proxy voting and engagement on environmental and social issues stop short of detailing desired actions on climate change or the firm’s strategy for escalating engagements with laggards. Still, the firm’s proxy-voting record indicates strengthening commitment in recent years. In 2022, MSIM funds (including Calvert and other subsidiaries) backed more than 90% of key ESG shareholder resolutions, with the highest support for those related to human rights disclosure, political lobbying, and workforce diversity. Calvert is a founding signatory of the Net Zero Asset Managers Initiative in 2020 and committed 100% of its assets under management to the effort. Calvert also joined Climate Action 100+, which leads collaborative efforts to address climate change, in 2018. MSIM, on the other hand, has yet to join either initiative.