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Defaqto adds ESG filters to Engage

14 March 2021

Defaqto has launched advanced ESG filters in its financial planning software, Defaqto Engage, following the launch of ESG Reviews late in 2020.

The ESG filters provide 31 new data points that can be applied to a population of sustainable funds or used on an exclusionary basis for the wider fund universe. This, Defaqto says, allows advisers to filter funds in line with the client’s ESG preferences and have in-depth conversations that result in the most suitable advice.

Depending on the client, advisers can choose to only research sustainable investment funds, which have an investment approach that selects and includes investment funds based on fulfilling certain sustainability criteria and/or delivering on specific and measurable sustainability outcomes.

The funds can then be filtered at a more granular level under sustainability.

Key filters include:

• Community Development

• Low Carbon/Fossil fuel free

• Environmental

• Renewable Energy

• Alcohol exposure

• General Environmental sector

• Low Carbon Designation

• Carbon Risk Classification

The ESG filters and sorts used as part of a recommendation will automatically be included in the research report.

Pan Andreas, head of Insight & Consulting (Funds & DFM) at Defaqto said: “ESG is now bedding into advice processes. But advisers need more than a rating to help them discern whether a fund is doing more than just adding ‘ESG’ or ‘Sustainable’ to its name. Defaqto’s approach to this has always been to enable the adviser to easily access the information that allows them to deep dive and get under the bonnet of a fund.

“Armed with ESG filters within Defaqto Engage, advisers can directly translate their ESG conversations with clients into the research they’re carrying out. The addition of Defaqto ESG Reviews further cements this detailed approach to research. This ensures that advisers can have well-informed conversations with clients and ultimately provide suitable advice to those who have expressed that they want to invest sustainably.”

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