Methodology of 2022 Impact Report

The following description refers to the methodology Etica Funds used to prepare the 2022 Impact Report, the document that measures the results of environmental, social and governance impact.

Each year, Etica measures the impact of securities selection (in comparison to a reference market or benchmark[1], as well as  engagement activities, carried out through dialogue with the corporate bodies of the companies in which the mutual funds managed by Etica invest.

More information is available in the Impact Report.

Calculating the impact of selection

The results presented in this document derive from an Etica Funds process of analysis, research and evaluation based on data provided by Bloomberg, ISS and the Science Based Targets Initiative. In this edition, the reference parameter for the analysis concerns the entire equity portfolio and also the corporate bond portfolio of Etica’s[1] Italian funds and the funds belonging to the Luxembourg Multilabel Sicav[2] launched by Etica for the international market and for institutional investors. The issuers under analysis are compared to the benchmark for the equity part of Etica’s Italian funds, i.e. the index in force up to 31 March 2022 MSCI World Net Total Return Index (in euro), as a market reference. The companies taken into account in the analysis for Etica Funds’ investments and the benchmark refer to their composition as of 31 December 2021. This edition of the Impact Report also details the analysis data separately for the Valori Responsabili Line, the Etica Impatto Clima fund — belonging to the Futuri Responsabili Line — and the three Multilabel Sicav funds. Overall, over 570 ESG indicators were considered, which Etica Funds associated with the Sustainable Development Goals. Among these, only the indicators with a coverage threshold higher than 70% were identified and taken into consideration for the companies in the Etica Funds portfolio and those in the benchmark. 

In this report, only a selection of the indicators analysed has been published, taking into consideration the areas with a high level of indirect materiality, as defined by the Etica Social Responsibility Policy, and those defined as strategic for dialogue with the companies, defined in the Etica Engagement Policy. Furthermore, the indicators reported for each area into which the report is divided have been associated with specific targets that refer to the United Nations Sustainable Development Goals. Many of the indicators selected refer to the subject areas identified for reporting the principal adverse impacts of investment decisions on sustainability factors, defined in Delegated Regulation (EU) 2022/1288.

Each impact indicator is calculated as a delta between the percentage of companies that satisfy a specific criterion in Etica Funds investments (a) and the same percentage for the Benchmark (b), i.e.: delta = (a-b)/b multiplied by 100.

Example: Companies that have declared a consumption target for energy from renewable sources:

Etica Funds = 39.6%, Benchmark = 25.87%. The impact is +53.26%, i.e. (39.6-25.87)/25.87 multiplied by 100.

Calculating “The impact of dialogue”

The data on dialogue were processed on the basis of the data collected by Etica Funds and the assessments Etica Funds analysts assigned to the answers provided by the companies with which there was dialogue during the year. The evaluation of the answers is based on a scale ranging from 0 to 5, on an increasing scale. Scores are assigned based on the completeness of the response, the degree of detail provided and how proactive the company was. The data relating to the response rates in the various dialogue areas are calculated as the ratio between the questions asked by Etica Funds for each area and the responses received, to which it was possible to attribute an assessment. Unlike in previous years, the calculation in this document also includes questions posed within collaborative dialogue initiatives with other institutional investors.

Example: “Has the company defined targets for lowering greenhouse gas emissions approved by the Science-Based Targets Initiative?” If the company’s response is partially satisfactory according to Etica Funds assessments, this response is given a score of 3 (on a scale from 0 to 5).


[1] Funds belonging to the lines Valori Responsabili and Futuri Responsabili (currently only the Etica Impatto Clima Fund).

[2] The three Luxembourg funds are part of Multilabel Sicav, a Luxembourg investment company established by Gam (Luxembourg), one of the leading companies in Europe specialised in providing private labelling services (branded products). GAM (Luxembourg) S.A. is the management company and domestic agent of MULTILABEL SICAV, while Etica Sgr is the investment manager and global distributor of the three funds. The funds, launched at the end of 2019, tend to replicate some of the consolidated strategies of the Etica Sgr Italian product range. They are registered in Luxembourg, Switzerland, Spain and Italy (for Italy, limited to institutional customers).