ESG Methodology & Ranking Criteria (by AUM)
|Ticker||Fund||ESG Methodology||ESG Ranking Criteria|
|ESGL||Oppenheimer ESG Revenue ETF||Sustainalytics ESG Scoring||Top 50% categories|
|ESGF||Oppenheimer Global ESG Revenue ETF||MSCI ESG Research Ratings||Top 50% rank|
|ISMD||Inspire Small/Mid Cap Impact ETF||Inspire Impact Score||Biblical Values and positive impact|
|NUSC||NuShares ESG Small-Cap ETF||TIAA ESG Methodology||ESG Leaders and Carbon Emissions Screens|
|ESGN||Columbia Sustainable International Equity Income ETF||MSCI ESG IVA Methodologie||No lower than BB|
|NULG||NuShares ESG Large-Cap Growth ETF||TIAA ESG Methodology||ESG Leaders and Carbon Emissions Screens|
|NUMG||NuShares ESG Mid-Cap Growth ETF||TIAA ESG Methodology||ESG Leaders and Carbon Emissions Screens|
|NULV||NuShares ESG Large-Cap Value ETF||TIAA ESG Methodology||ESG Leaders and Carbon Emissions Screens|
|NUMV||NuShares ESG Mid-Cap Value ETF||TIAA ESG Methodology||ESG Leaders and Carbon Emissions Screens|
|ESGS||Columbia Sustainable U.S. Equity Income ETF||MSCI ESG IVA Methodology||No lower than BB|
|ESGW||Columbia Sustainable Global Equity Income ETF||MSCI ESG IVA Methodology||No lower than BB|
Most of these funds use a proprietary ESG ratings. Usually, these methodologies rank companies based on how well each company manages its environmental, social and corporate governance (ESG) practices.
For example, MSCI’s model makes adjustments depending on each industry ESG risk exposure and how well a company’s management mitigates or takes advantage of each ESG risk:
- Environmental risks include themes such as carbon emissions, natural resources usage, pollution and waste management.
- Social risks consist of themes around labor health, safety and human capital development, product life liability, and stakeholders conduct.
- Corporate governance risks embody themes such as board structure, pay, business ethics and transparency.
Principle Value Screening
Some indexes also exclude companies from their investment universe to better align their products to their principle values.
As an example, the Inspire Small/Mid Cap Impact ETF (ISMD) aims to select companies associated with biblical values, thus excluding companies with any degree of participation in abortion, gambling, alcohol, pornography, LGBT lifestyle, or doing business in terrorist-sponsoring countries.
In other cases, such as NuShares’ funds, their indexes exclude any company that owns fossil fuel reserves, as part of their carbon-screening criteria.