3 Easy Steps to Find a Suitable ESG Fund

Morningstar's ESG Screener makes it simple to find funds that score highly in environmental, social and governance factors

Karen Wallace 11 November, 2020 | 9:05AM

Bridge to trees

If you’re interested in learning more about ESG investing and finding some high-quality environmental, social, and governance funds, you’re in good company. Morningstar keeps track of how much money people invest in different types of funds, and by our count, ESG funds are on track for their best year ever. 

2020 has presented a good backdrop for ESG funds to make their case - ESG funds have performed well relative to conventional funds during some really volatile markets a and saw inflows doubling in second quarter of this year, as Covid-19 and Black Lives Matter have raised awareness of social injustice and economic disparity in the US. 

ESG 101

ESG considerations aren’t just “nice-to-haves”; they can directly affect a company’s financial results. Morningstar views how well a company addresses relevant ESG factors as areas of investment risk and opportunity. A company that ignores ESG issues or commits a misstep could incur significant economic costs that jeopardise its ability to earn long-term, sustainable profits. As such, ESG risk is measurable and quantifiable.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Karen Wallace  Karen Wallace is an editor with Morningstar.

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