Women are leading the charge to promote change in the investment landscape industry. According to a Morgan Stanley study, 84% of women expressed interest in sustainable investing, compared to only 67% of men and a Capgemini World Report 2020 stated that 40% of ultra-high net-worth individuals were interested in sustainable investments. There can be a deep satisfaction knowing that your investment dollars are going to promote social change while also expecting a fair return. So, what is ESG?
ESG looks at ‘extra-variables’ that may impact the risk and return profile of an investment. Environmental factors include waste and pollution, resource depletion, greenhouse gas emissions, deforestation, and climate change. Social factors can include working conditions, health and safety, racial diversity, and conflict. Governance looks at corporate policies and board diversity.
News headlines over the past few years have highlighted corporations’ addressing these social issues:
-Microsoft’s pledge of over $500 million to increase housing options in Seattle -Starbucks’ 100% tuition coverage for an online degree at Arizona State University -Apple achieved carbon neutrality in 2020
So where can you get started in researching for sustainable companies?
MSCI provides an ESG rating for all publicly traded companies. The methodology focuses on the rating history, distribution, and has key metrics based on a company’s industry. Take a look for yourself below.
Morningstar also provides investors free resources into building an ESG portfolio, sourcing ESG funds, and frequent white paper publications.
List of Socially Responsible and ESG ETFs
DSI iShares MSCI 400 Social ETF MSCI ESG Rating AA Expense Ratio: 0.25% The goals of the ETF are to gain exposure to a range of large-, mid- and small-cap U.S. stocks with leading environmental, social, and governance practices. The largest holdings include Microsoft, Facebook, Google, Visa, and Tesla.
FIW First Trust Water ETF MSCI ESG Rating A Expense Ratio: 0.55%
The ISE Clean Edge Water Index is a modified market capitalization-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the potable water and wastewater industry. The Index begins by establishing the total population of stocks in the potable and wastewater industry and eliminates stocks which do not meet the Index's baseline eligibility requirements.
CBRN iShares MSCI Low Carbon Target ETF MSCI ESG Rating AA Expense Ratio: 0.20%
Obtain exposure to a broad range of global stocks that are less dependent on fossil fuels.
Target and overweight companies with low potential and measured carbon emissions relative to higher carbon-emitting peers.
SHE State Street Gender Diversity ETF MSCI ESG Rating BBB Expense Ratio: 0.20%
This ETFs seeks to provide exposure to US companies that demonstrate greater gender diversity within senior leadership than other firms in their sector. Companies in the Index are ranked within each sector by three gender diversity ratios
These are just a few of the available resources to help you find investments that match your values. Please sign up for our newsletter to learn more about future women’s focused investment insights.
Disclosure: For disclosure information please visit https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=623897 Investors should consider the risks, charges and expenses carefully before investing. Past performance is NOT indicative of future results. This information is not intended to provided investment advice. Market conditions change frequently and there is no assurance that trends described above will continue. Source: Morningstar, MSCI, iShares
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