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Columbia Total Return Bond Inst SRBFX Sustainability

| Analyst rating as of

Sustainability Analysis

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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

The firm earns a Morningstar ESG Commitment Level of Basic.

Columbia Threadneedle has raised sustainable investing up to one of its top corporate priorities. Demonstrated progress in integrating the company’s growing ESG resources into its global fundamental research platform is encouraging. The firm built on Threadneedle Asset Management’s experience as a founding signatory of the UN Principles for Responsible Investment and its responsible investing team created in 1998. This team, which now counts 15 experienced professionals divided between thematic research and investment stewardship (company engagement and proxy voting), is fully integrated into the firm’s global research platform. A strong flow of third-party data from multiple providers as well as a suite of proprietary tools including dedicated ESG portfolio monitoring, ratings, screeners, and dashboards, are available to every investment professional across the firm.

However, integration of ESG factors has yet to be deployed beyond the research process and across a higher number of strategies. ESG-focused strategies represent a mere 6% of the company’s half-trillion dollars in asset under management. As such, the vast majority of the firm’s products is run by managers with full latitude to integrate or not integrate ESG criteria into their investment decisions.

When it comes to proxy voting, Columbia Threadneedle has structured policies in place and a strong record of voting in support of key climate and social justice resolutions. On the ESG engagement side, the firm’s approach is developing in the right direction, building on a dedicated team integrated into the global research group. However, it is still in its early stages. We note that the overall engagement strategy is missing specific stated goals in terms of outcomes against which the effectiveness of engagements can be measured.

While the deal is not expected to close before the end of 2021, we see Columbia’s acquisition of BMO GAM’s European business, including its ESG capabilities, as a signal of the company’s growing commitment to sustainable investing.