The sustainable liquidity management investment options for both institutional and retail investors continue to expand.  At least ten firms, identified by Sustainable Research and Analysis LLC, now offer sustainable money market funds with a choice of investing options that include a values-based orientation, negative screening and/or ESG integration.  In one case, ESG integration combines negative screening and issuer engagement, as referenced in Table 1.   

Table 1:  Sustainable Money Market Funds and their Sustainable Investing Strategies

Fund FirmValues/ Religious BasedNegative Screening (Exclusions)ESG IntegrationEngagement
BMO  X 
GuideStoneXX  
DWS XX 
BlackRockX1XX2 
Federated Hermes  X 
J.P. MorganX1/3 X 
Morgan Stanley XXX4
Goldman Sachs (GS)X1   
State Street Global Advisors (SSgA)  X 
UBS XX 
Notes of Explanation: 1. Values-based includes strategies or approaches focused on addressing social issues without necessarily seeking to track and achieve measurable outcomes. 2. Applies to environmental risks only, 3. Applies to four money market funds, including the 100% US Treasury Money Market Fund, Prime Money Market Fund, US Government Money Market Fund and US Treasury Plus Fund. 4. Morgan Stanley may engage with management of certain issuers regarding corporate governance practices as well as what the adviser deems to be materially important environmental and/or social issues facing a company. Source: Sustainable Research and Analysis LLC, using fund prospectuses and SAIs.

As reported in September of 2019, J.P. Morgan Asset Management amended the prospectuses of 12 money market funds to explicitly reflect the onboarding of environmental, social and governance factors as part of its security selection strategy, joining a limited but growing list of money market fund management firms that have adopted sustainable investing strategies (refer to notes of explanation).  Last month. J.P. Morgan Chase launched a new Empower money market fund share class exclusively to support minority-owned and diverse led financial institutions.  The Empower product, applicable to four of the firm’s money market funds, will be distributed exclusively by Minority Depositary Institutions (MDIs) and diverse-led Community Development Financial Institutions (CDFIs) and will feature annual donations from J.P. Morgan Chase to support community development.  The Empower offering is part of the firm’s recently announced $30 billion commitment to advancing racial equity and will be making an annual donation of 12.5% of revenue received from the 18 basis point management fees on Empower share class assets to support community development.  Google is anchoring the program’s launch with an intent to invest $500 million.

Sustainable Research & Analysis LLC provides a timely monthly snapshot of trends and developments affecting the sustainable investing market segment as seen through the lens of mutual funds, ETFs and other registered investment products. The Monitor tracks total net assets, fund flows, fund re-brandings, new fund firms, new fund launches and fund closures.  CLICK HERE to request additional information.

Note of Explanation:  While definitions continue to evolve, sustainable investing refers to a range of five overarching investing approaches or strategies that encompass:  values-based investing, negative screening (exclusions), thematic investing, impact investing and ESG integration, in turn classified into ESG Integration, ESG Integration-Consideration and ESG Integration-Mixed, referring to a core strategy consisting of ESG integration, but exclusions, impact or thematic approaches may also be employed.  Shareholder/bondholder engagement and proxy voting may also be employed along with one of more of these strategies that are not mutually exclusive.  Prepared by:  Sustainable Research and Analysis LLC

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