Tools to Research Individual Companies

COMPANY RATINGS

The following websites rate hundreds or thousands of companies based on their ESG behaviors. Several of these sites contain information that explains how the company compiles and creates its metrics.

• EthosESG is a sustainable investment site designed primarily for financial advisors and asset managers. Fortunately, the company also freely provides some of their corporate and stock fund rating information to the general public. Not only does the site provide an overall score, it also breaks the analysis down into dozens of specific issues, which helps you prioritize the values that are most important to you.
• Just Capital ranks over 800 companies using a proprietary process that gives highest weight to workers’ rights, followed by customer, community, environmental, and shareholder concerns. At the bottom of their homepage, Just Capital offers the opportunity to sign up for email updates which contain valuable information for values-aligned investors.
• MSCI ESG scores over 8,500 companies and 680,000 financial products from around the world. The ratings are presented as grades that range from AAA (leaders) to CCC (laggards). The site shows how a company has ranked over time, as well as areas where a company is leading or lacking.
• Refinitiv ESG Screen claims to have the largest ESG content collection in the world. The company uses publicly available data to assess ESG performance and commitment across 10 main themes. Over 10,000 companies are included in this global database. While you may find that the publicly available data on this website is somewhat limited, it does provide another resource you can use to deepen your knowledge about the ESG scores of a company that you might be considering as an investment.
• S&P Global ESG Scores are a relatively new resource. This website analyzes up to 1,000 data points on over 9,200 companies. You have to scroll down a bit on the ESG Scores page to find the search bar. Once there, you can see how a company ranks in environmental, social, and governance categories. You can also find results showing how a company aligns against the industry mean and how much data was available for analysis.
• Sustainalytics offers ESG risk ratings on over 4,600 companies. The publicly available content is limited. If you want access to slightly richer data, you have to provide your contact information. However, you can get a sense of company and management ESG exposure risks are considered low, medium, or high without taking the extra step.

EXCLUSION LISTS

There are a few exclusion lists highlighting companies that are considered to be bad actors in specific social justice areas. These are two examples.

• Human Rights Campaign. This website lets you search listings of companies, municipalities, and healthcare facilities to determine how well they support LGBTQ employees.
• Racial Justice Exclusion List. A relatively new player, this list includes companies involved in prisons, immigration detention, surveillance, and occupied territories. If you are interested in racial justice investing, you may also want to know about Adasina, which recently launched the Adasina Social Justice All Cap Global ETF (Ticker: JSTC).

Tools to Find and Research Values-Aligned Stock Funds

STOCK FUND LISTS

Since values-aligned investing is becoming more popular, a growing number of financial websites and pundits have written articles in which they offer their views on the “best” values-based companies and stock funds to invest in. A web search on a phrase like “Best ESG funds of 2022” will return pages of results and a range of perspectives. Here are a few of the results that we found to get you started.

Remember, don’t rely solely on one site’s recommendations. Do your own research. Also, be careful to understand the possible biases of the person or organization giving investment advice.

• Forbes Advisor: The Best ESG Funds of July 2022
• Kiplinger: 15 Best ESG Funds for Responsible Investors (2021)
• Morningstar: 2022’s Top Sustainable Funds Weather a Tough Market
• The Impact Investor: 21 Best ESG ETFs to Invest in Today (2022 Guide)

These sites provide lists of dozens of values-aligned funds. What is great about them is that unlike the results of some of the web research mentioned above, these sites offer information on values-aligned fixed income investments, as well as information on sub-categories of stock funds, such as large cap blend, mid-cap growth, foreign small/mid value, and so on. If you are at the point in your investment journey where you are hoping to diversify your stock portfolio across a range of different options, then these lists will be a particularly valuable resource.

• Natural Investments Heart Rating. To be included on this site, a fund has to have an explicit socially-responsible mandate. Fewer than 200 funds are currently listed.
• Schwab Socially Conscious Funds List. A comprehensive list of fixed income and public equities funds broken down by type. Among public equities, the list includes funds of different market cap sizes, geographies, and value/growth, as well as target-risk and target-date options.
• US|SIF. This website enables a quick scroll through the mutual funds and ETFs offered by the members of the US Forum for Sustainable and Responsible Investing. Compare returns and expense ratios, download proxy-voting records, and get a sense of a fund’s ESG investing strategy.

TOOLS TO RESEARCH STOCK FUNDS

• As You Sow Invest Your Values. This easy-to-use tool is one of Janine’s favorites. Use it to scrutinize over 3,000 of the best-known mutual funds and ETFs to determine their standing across seven themes: fossil fuels, deforestation, gender equity, civilian firearms, military weapons, prison industrial complex, and tobacco.
• ETF.com ESG Ratings. This extremely useful website helps you find ETFs that are specific to asset class, market segment, geography, and a range of other criteria that you can select. You can also search for a fund’s MSCI ESG Quality Score and MSCI ESG Rating. These options are under the Analysis tab on the left-hand side of the website. You will have to sign up for the site by providing your name and email address to access this content however.
• EthosESG was cited above as a tool for assessing the ESG scores of publicly traded companies. It is also a great resource for stock funds.
• Morningstar ESG Screener. Morningstar scores over 21,000 mutual funds and ETFs. This link takes you directly to a page where you can enter a stock fund and see its ESG rating immediately. It is also possible to find this information when you research a fund by entering its ticker at Morningstar.com. In this case, you can find the sustainability ratings under the “Portfolio tab”. If you want to know more about how to use Morningstar to analyze your stock funds, watch the Public Equities Basics, Parts 1, 2, and 3 videos, which you can find on the Activate Your Money YouTube channel.

Robo-Advisors

• DoughRoller: Best Socially Responsible Investing Robo Advisors. You will need to scroll through some preamble to access Chris Muller’s research and opinion on the topic of socially responsible robo-advisors. While the information is helpful, please be aware that DoughRoller may receive compensation from some of the companies mentioned, so always validate the provided information with additional research.
• Betterment’s Socially Responsible Rationale and Approach. Betterment is a robo-advisor that offers three socially responsible investment portfolios. This link takes you to the company’s explanation about how the criteria and approach they used to design these investment options. For some, this may be too much information. However, if you are interested in understanding at least one providers rationale, then you should find this article of interest.
• Ellevest: Creating Ellevest Impact Portfolios. Ellevest is a unique company in that it is women-founded, women-run and women-centric. Over time, this robo-advisor has become increasing focused on values-alignment and uplifting women. In addition to robo services, the company also offers personalized financial advisory services. This link takes you to a page that explains the company’s values-alignment strategy. The site as a whole provides great information and content that is developed through the lens of the female investor.

General Information

Archive of Articles by Jon Hale, Ph.D., CFA, and Head of Sustainability Research for the Americas at Morningstar. Jon is a prolific and extremely knowledgeable writer on the subject of values-aligned investing, particularly as it pertains to the public equities market. This link will take you to an archive of his writing. He also posts regularly on Medium and Twitter.

Shareholder Advocacy

The Shareholder Advocacy section in Chapter 8 was drafted originally by Andy Behar, CEO of As You Sow. If this topic is of interest, Andy’s book, The Shareholder Action Guide: Unleash Your Hidden Powers to Hold Corporations Accountable, is highly recommended.

Proxy Voting Guidelines provided by As You Sow offers guidance on voting your proxies. In addition, a yearly report gives in-depth analysis and expert insight on hundreds of social and environmental shareholder resolutions. It is one of the best, if not the best, source of information available on this topic.

2021 As You Sow Shareholder Impact Review. To learn more about why we recommend As You Sow so strongly, this report outlines the incredible results of their shareholder advocacy in 2021.