Sustainable Investing
Sustainable Investing Built for Your Goals
2021 Stewardship Report
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Northern Trust offers a range of solutions to meet the sustainable investing objectives and targeted outcome for investors globally. Offerings cover equity, fixed income and real assets, leverage our global depth & expertise in quantitative active and index investing and are available in vehicles and structures to suit the needs of institutional and individual investors.
- Exclusionary Screening: Strategies that avoid investing in companies based on specific business activities, values or risk use environmental, social & corporate governance (ESG) criteria and analytics. These types of investment strategies may also incorporate a norms-based exclusion approach relative to principles from the UN Global Compact.
- Best-in-Class: Products that seek to invest in those companies that are leaders in implementing ESG or Sustainable Investing principles and avoid those companies who may be lagging in this area.
- ESG Integration: Strategies that incorporate ESG considerations across business activities and investments to target companies exhibiting both financial and non-financial sustainability; eliminating exposure to companies involved in objectionable business lines, and avoiding exposure to the least financially sustainable companies.
- Proxy Voting and Engagement: We advocate for strong corporate governance practices that we believe will create and sustain long-term value for our clients. Read our Proxy Voting and Engagement policy.
*Best-in-class ESG is industry
terminology referring to an investment approach that selects companies that are leaders
in implementing ESG.
QUANTITATIVE STRATEGIES
The strategy implements a unique Environmental, Social and Governance (ESG) integration strategy, alongside a proprietary quality factor screen, to quantitatively target companies with both financial and non-financial sustainability.
The strategy uses a proprietary multi-factor model based on rigorous academic and empirical research to target quality U.S. large- and mid-cap companies with favorable environmental, social and governance (ESG) qualities.
Index
Northern Global Sustainability Index Fund
The fund seeks to replicate the investment composition and overall performance
of the stocks included in the MSCI World ESG Leaders Index which is a diversified,
sector neutral global benchmark constructed using environmental, social and governance
(ESG) factors. The sector and regional neutrality is designed to help the Index outperform
other social responsibility and sustainability indices. Fund Objective: Capital appreciation.
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View Fund
Exchange Traded Funds
The fund attempts to provide a portfolio for investors who are seeking a focus on select ESG KPIs of US companies. Fund objective: The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the STOXX® USA ESG Select KPIs Index (the “Underlying Index”).
The fund attempts to provide a portfolio for investors who are seeking a focus on select ESG KPIs of global companies. Fund objective: The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the STOXX® Global ESG Select KPIs Index (the “Underlying Index”).
The fund attempts to provide a portfolio for investors who are seeking to align their ESG & climate values within core developed market equities. Fund objective: The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust ESG & Climate Developed Markets ex-US Core IndexSM (the “Underlying Index”).
The fund attempts to provide a portfolio for investors who are seeking to align their ESG & climate values within core US large cap equities. Fund objective: The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust ESG & Climate US Large Cap Core IndexSM(the “Underlying Index”).
The fund attempts to provide a portfolio for investors who are seeking to align their ESG & climate values within core high yield fixed income. Fund objective: The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust ESG & Climate High Yield U.S Corporate Core Index (the “Underlying Index”).
The fund attempts to provide a portfolio for investors who are seeking to align their ESG & climate values within core investment grade fixed income. Fund objective: The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust ESG & Climate Investment Grade U.S Corporate Core Index (the “Underlying Index”).
Equity Risk: Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed-income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. International Risk: International investing involves increased risk and volatility. Index Fund Risk: The performance of the Fund is expected to be lower than that of the Index because of Fund fees and expenses. It is important to remember that there are risks associated with index investing, including the potential risk of market decline, as well as the risks associated with investing in specific companies. Environmental, Social and Governance (ESG) Investing Risk: is the risk stemming from the environmental, social and governance factors that the Fund applies in selecting securities. The Fund's ESG screening process may affect exposures to certain companies or industries and cause the Fund to forego certain investment opportunities. For more important risk information, please visit individual fund pages information.
An investment in FlexShares® is subject to numerous risks, including possible loss of principal. Fund returns may not match the return of the respective indexes. The Funds are subject to the following principal risks: asset class; commodity; concentration; counterparty; currency; derivatives; dividend; emerging markets; equity securities; fluctuation of yield; foreign securities; geographic; income; industry concentration; inflation-protected securities; infrastructure-related companies; interest rate / maturity risk; issuer; large cap; management; market; market trading; mid cap stock; MLP; momentum; natural resources; new funds; non-diversification; passive investment; privatization; small cap stock; tracking error; value investing; and volatility risk. A full description of risks is in the prospectus.
Please carefully read the summary prospectus or prospectus and consider the investment objectives, risks, charges and expenses of Northern Funds or FlexShares before investing. Call 800-595-9111 to obtain a summary prospectus or prospectus for Northern Funds or visit www.flexshares.com for FlexShares. The summary prospectus and prospectus contain this and other information about the Funds.
Shares of the Northern Funds and FlexShares are offered only by a current Prospectus and are intended solely for persons to whom shares of US registered funds may be sold. This site shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of shares of the Northern Funds in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Northern Funds are distributed by Northern Funds Distributors, LLC, not affiliated with Northern Trust.
FlexShares ETFs are distributed by Foreside Fund Services, LLC.