GuideStone Funds International Eq Idx Fd has several promising attributes that may appeal to sustainability-focused investors.
GuideStone Funds International Eq Idx Fd has an average Morningstar Sustainability Rating of 3 globes, indicating that the ESG risk of holdings in its portfolio is similar to that of its peers in the Global Equity Large Cap category. Investors concerned about ESG risk may be better off with funds in the category that receive 4 or 5 globes, as they tend to invest in securities less exposed to ESG risk. 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.
GuideStone Funds International Eq Idx Fd has a Carbon Risk Score of 9.27, indicating portfolio companies face low carbon-related risks in the transition to a low-carbon economy. The fund's current involvement in fossil fuels rests at 10.12%, which compares favorably with 10.50% for its average category peer. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas. By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with tobacco, and, as expected, the fund is not currently invested in such companies.
One potential issue for a sustainability-focused investor is that GuideStone Funds International Eq Idx Fd doesn’t have an ESG-focused mandate. A fund with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes.
The fund has a modest level of exposure (7.01%) to companies with high or severe controversies. Companies with high or severe controversies are involved in incidents such as corruption, employee abuses, environmental incidents, and corporate scandals that pose serious business risks to the company.