AllianceBernstein Funds

Funds Group: AllianceBernstein Funds

Management Company: AllianceBernstein L.P

Funds Affected: (1) AB Sustainable Global Fund and (2) AB Impact Municipal Income Shares

Principal Sustainable Investment Strategy: (1) Thematic, ESG Integration; (2) ESG Integration


(1) The fund invests in equity securities of issuers located throughout the world that AllicanceBernstein believes are positively exposed to sustainable investment themes. The adviser employs a combination of “top-down” and “bottom-up” investment processes with the goal of identifying securities of companies worldwide, fitting into sustainable investment themes. The adviser identifies sustainable investment themes that are broadly consistent with achieving the United Nations Sustainable Development Goals. Examples of these themes may include energy transformation, resource preservation, equality and opportunity, and improving human health and safeguarding lives, and the themes are expected to change over time based on the Adviser’s research. In addition to this “top-down” thematic approach, the adviser also uses a “bottom-up” analysis of individual companies, focusing on prospective earnings growth, valuation, and quality of company management and on evaluating a company’s exposure to environmental, social and corporate governance (ESG) factors. The adviser emphasizes company-specific positive selection criteria over broad-based negative screens in assessing a company’s exposure to ESG factors.
(2) The fund pursues its objective by investing principally in high-yielding municipal securities of any credit quality that (i) score highly on the adviser’s environmental, social and governance criteria and (ii) are deemed by the adviser to have an environmental or social impact in underserved or low socio-economic communities. The adviser evaluates each security in which the fund invests using both a traditional municipal bond credit analysis and a consideration of the security’s overall ESG score under the adviser’s ESG evaluation criteria. Under this ESG evaluation, to arrive at an overall ESG score, each security is scored on environmental, social and governance factors, and the scores are weighted based on the adviser’s assessment of the relevance of each factor within a given sector (e.g., education, health care, renewable energy and mass transit). For example, social factors are weighted more heavily in the overall ESG score for security of an issuer in the education sector than they are for security of an issuer in the mass transit sector, where environmental factors predominate. The adviser regularly reviews the overall ESG scores assigned to securities under consideration for purposes of determining the securities in which to invest for the fund.

The adviser’s ESG evaluation is conducted on an industry sector basis and includes the use of key performance indicators that vary in materiality by sector. The adviser’s environmental evaluation covers issues such as clean and renewable energy, climate change and water conservation. The adviser’s social evaluation covers issues such as economic impact, high quality safety-net healthcare and overall community health needs, and the reduction of achievement gaps between wealthy and poor school districts. The adviser’s governance evaluation covers issues such as stewardship of debt and capital, board governance and transparency.

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