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Alliance Bernstein

PRI reporting framework 2018

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SG 18. Innovative features of approach to RI

18.1. Indicate whether any specific features of your approach to responsible investment are particularly innovative.

18.2. Describe any specific features of your approach to responsible investment that you believe are particularly innovative.

In 2017 we worked on developing new products: Our Sustainable Global Thematic Fixed Income strategy will invest in a combination of Green Bonds and other bond (primarily non-government) that our research considers to be sustainable. Responsible Strategic Equities is being developed to meet the needs of our private clients.

We currently have an Australian equities investment solution in development called AB Green Managed Volatility Equities (MVE), which is set against our ‘Green Alpha’ philosophy. Green alpha aims to have a positive impact on climate change and deliver attractive investment returns based on three principles: 1) Anchor the portfolio in low volatility equities as they are inherently low carbon and may deliver attractive investment returns, 2) Put a ‘price on carbon’ to efficiently reduce carbon emissions to even lower levels and measure success in terms of green alpha. 3) Offset the portfolio’s remaining emissions by purchasing carbon credits to remove CO2 from the atmosphere.

In 2016 we launched a number of innovative products. We built a unique process to evaluate the specific ESG criteria defined, integrate it into our research and portfolio implementation process, monitor on an on-going basis, and provide reporting.

(1) In November 2016, our AB Global Thematic Growth Fund (US Mutual Fund) evolved from a global thematic growth strategy to a sustainable thematic strategy, now called the AB Sustainable Global Thematic Fund. The strategy utilizes an investment process that has a top-down focus on sustainable investment themes that align with the United Nations Sustainable Development Goals (UNSDG) with a bottom-up Environmental, Social and Governance (ESG) integration process.

(2) In the third quarter of 2016, we launched a Municipal Impact strategy which builds on AB’s municipal credit expertise to invest in issues in underserved communities whose proceeds have a positive social and/or environmental impact.

(3) In September 2016, we launched a Global Responsible Factor Fund that invests in equity securities of global companies that meet certain ESG criteria.

(4) Within our Fixed Income services, each credit analyst [muni and corporate] is responsible for developing a proprietary E, S and G score for their issuers, which has a direct impact on their overall rating of the credit and ultimately our portfolio positioning. For corporate credit this has been in place for longer, but it was enhanced and implemented more broadly in 2016. 

(5) In July 2016, we created a low carbon offering for our private clients.  

In addition, we also have the following longer-standing ESG-SRI Dedicated Portfolios:

(6) In March 2013, we introduced a new range of Ethical Target Date funds for the UK Defined Contribution market. The funds combine the sophistication of target date funds with responsible investment, and they invest in index funds that track the FTSE4Good indices.

(7) In March 2014 we launched the Next 50 Frontier Markets Fund which strives to adhere to the IFC performance standards by deploying intensive fundamental research with a sharp focus on the environment, social issues and governance (ESG) to build a diversified stock portfolio with high growth potential and attractive valuations.


18.3. Additional information.