Content Package: About ESG Screening

Compliance reviewed April 1, 2022

Uploaded April 1, 2022

Position paper summary

Values-Based Investing: Beyond Negative and Positive Screening

Clearly, the primary goal for investors is to make money. But increasingly, those who put their money to work in capital markets want their investments to align with their values. The numbers tell the story: In just the third quarter of 2021, investors poured $15.7 billion into U.S. sustainable funds—those that use environmental, social and corporate governance (ESG) criteria in selecting investments. The total assets in such funds now surpass $330 billion.

ESG-powered screening allows investment managers to make fine-tuned choices as they seek to achieve strong financial and nonfinancial returns. These days, if the question is whether to screen investments in or out of a portfolio, the answer is increasingly “yes.”

Blog #1 summary

How ESG Managers Are Closing the Performance Gap

Still concerned that investing with an Environmental, Social and Governance (ESG) lens means sacrificing returns? It’s time to turn the page on that myth. Exchange-traded funds (ETFs) that use environmental, social and governance (ESG) factors to help select U.S. stocks did very well in 2021. Of the 10 largest such funds, seven beat the S&P 500 index.

Blog #2 summary

Beyond Negative and Positive Screens

In thinking about funds and portfolios with a social or environmental focus, it’s tempting to imagine their managers as being akin to nightclub bouncers: “Good” companies are welcome, while “bad” ones are turned away.

But that’s an outdated analogy. Decades ago, funds used relatively crude screens to include or exclude certain stocks or even entire industries. In the modern generation of funds, however, managers deploy a finely calibrated investment selection process that incorporates environmental, social and governance (ESG) factors.

Infographic summary

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