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 22.04.2021
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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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About Author

Karen Wallace  Karen Wallace, CFP® is Morningstar’s director of investor education.

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