ESG Investing: Equities

The most common form of ESG exposure to equities is through mutual funds and ETFs.  According to the Forum for Sustainable and Responsible Investment (US SIF), this included (as of 2020) more than 700 mutual funds and more than 90 ETFs.  Asset managers may incorporate ESG into equities investment strategies through integration, screening (both positive and negative), and a thematic approach.

Often ESG investments may be based on a stock’s ESG scores/ratings. Numerous firms provide ESG research, ratings, scores, and indices  – including Bloomberg, JUST Capital, MSCI, Refinitiv, and S&P Dow Jones Indices.

PRI has produced a Practical Guide to ESG Integration for Equity Investing to help asset owners and investment managers incorporate integration techniques into their equity investment decisions. It has also issued, along with the CFA Institute, a detailed report on Guidance and Case Studies for ESG Integration: Equities and Fixed Income.

And, US SIF, has compiled a chart that displays all ESG-related mutual funds offered by its institutional members – and includes information on fund performance, screening and advocacy, proxy voting, and account minimums.