Impact Investing Basics: ESG Analysis Tools Every Newbie Should Use

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Impact investing can be an intimidating concept for most investors. Even those who’ve been active in the stock market for a long time can feel overwhelmed by the idea of investing with the purpose of doing good in mind. Luckily, there is a wide selection of tools that can make impact investing a lot easier than it really is.

Online tools that help you screen companies and their ESG endeavors are a good way to reduce the amount of work that you do with impact investing. As there are lots of tools that you can use out there, here are a few that you should definitely try out.

  1. Sustainalytics

When it comes to ESG investing, one of the names that continue to catch the attention of investors is Sustainalytics. The brand has consistently brought a good stream of research materials for both institutional and retail investors.

Sustainalytics provides a deep and detailed look at global environmental, social, and governance (ESG) research and assessments. The company offers a range of services including ESG research, ratings, and analytics.

Sustainalytics has a variety of tools that all levels of investors can use for analyzing and investing in ESG. These include important tools such as the Sustainalytics Corporate Ratings Database, Environmental Performance Database, and Social Performance Database. Each of these serves a specific purpose that helps make finding the right companies a lot easier. Let’s dive deep into each of these.

The Sustainalytics Corporate Ratings Database is a detailed dataset of his ESG ratings which includes over 9,000 companies. The database contains ratings on environmental, social, and governance performance.

Sustainalytics’ Environmental Performance Database, on the other hand, contains over 60,000 performance indicators focused on analyzing a company’s environmental efforts. These are offered by 9,000 companies. The database contains data such as energy consumption, emissions, and water consumption.

  1. As You Sow

As You Sow is another amazing ESG investing tool to consider. As one of the top names in its class, As You Sow offers a comprehensive suite of tools to find the best impact investing companies.

ESG investors can use the tool to easily identify the social responsibility of over 3,000 mutual funds. You can also find out how your carbon footprint is impacting society on the official website of As You Sow

A fund’s rating can be viewed on a scale from A to F. This of course is dependent on what type of financial analysis you want to do. 

There’s enough ESG data that will be readily available once you scroll to the next page that loads.  From there, you can easily see and analyze all of the ESG metrics that will be vital in your search. You can even add a variety of filters to further deepen the results. 

You can do this by clicking the Find Funds button located on the right side of the navigation bar. The tool gives you access to filters such as fund family, category, class, and performance.

This tool is perfect for sustainable investments and investment strategies. This will allow employers to get involved and plan to improve through sponsorship. It can be the best choice for both retail and institutional investors.

  1. Morningstar ESG Screener

The Morningstar ESG Screener shares data with its sister company, Sustainalytics. In other words, it becomes a performance analysis tool that’s more than capable of helping you find great investment opportunities. 

This allows you to search for funds either by company name or its ticker to narrow your search. You can choose funds that have already been identified as having a strong focus on sustainability or ESG. 

This is only possible with low CO2 emissions. Morningstar sustainability scores are rated on a scale of 1 to 5. Higher globes indicate funds with more investments in corporations or companies that have lower ESG risks. This shows how effective the fund is compared to its peers in dealing with ESG risks.

The Morningstar ESG Screener also features a portfolio tab. This is where you can find a deeper analysis tool as well. The calculations include the average ESG score of the brand for the past 12 months. The average values are used for ranking funds which will help you compare scores easily with competing brands.

Brands are rated as sustainable investments by Morningstar ESG if they meet the criteria. The funds are then classified into different groups focused on ESG, impact, and environmental factor funds.

  1. US SIF

The US SIF sustainable investments and mutual funds are great drivers for your portfolio. This is a very popular investment program that has partnered with a wide selection of financial institutions as well. Its partners include brokers, investment management firms, and even non-profit organizations.

Additionally, the US SIF has partners that work together with the same goal of finding the right sustainable investment practices. Their main goal is to increase their awareness through sustainable mutual funds and ETF charts as well. It’s a niche part of investing that can help you find great additions to your portfolio.

The US SIF tool also helps you analyze your financial performance as it delivers the best insights into ESG analysis as well. From the US SIF tab, you can see a good selection of companies and important data. Those include voting records and shareholder activity records. Both of which are very useful for risk analysis and many others.

  1. MSCI ESG Ratings & Climate Search Tool

MSCI allows you to search a comprehensive ESG dataset of over 2,900 companies from the MSCI ACWI Index. Using this ESG tool is easy. All you need to do is enter a name or ticker to compare against global climate protection goals. Additionally, the tool also lets you view ESG risks and opportunities. 

Your target company’s impact on climate change is reflected in the implications of rising temperatures. It also shows alignment with global warming goals.

This tool transforms the current and projected carbon emissions of nearly 10,000 companies which will help you find even more ESG investment opportunities.

These are all publicly traded companies. However, conversion depends on the share of the carbon budget. From our ESG analysis, we can see companies that are out of alignment and those that are in alignment. This shows companies emitting low-carbon or high-carbon gases. ESG analysis also indicates decarbonization goals and whether companies are meeting them.

You can find the years in which the above companies achieved near-zero carbon emissions. ESG Ratings evaluates and ranks companies based on a variety of ESG issues. MSCI shows that the company is either lagging behind or ahead on key ESG issues.

  1. ETF By ESG Ratings

ETF by ESG Ratings is the perfect solution for investors that want to check out ESG ETFs.

The ESG tab provides his MSCI ESG data for funds that rely on their exposure to various ESG factors. This includes carbon footprint, sustainability impact, and governance risk to help you make better decisions throughout the investment process.

The platform displays fund ratings on the AAA-CCC scale, with a quality ESG score of 10. An EST analysis of an ETF shows the percentage of fund peers with its -ESG score below the fund in question.

In addition, it provides global positions compared to all funds from MSCI data sources. So you can see how your company ranks.

Finding his ESG ETFs is easy with this tool, but investor research shouldn’t stop there. The only platform that gives you access to the ESG data you need for ESG investing.

The tool hopes to understand how ETFs determine and manage ESG investments and to identify risks that are relevant. This promotes safe and sustainable investments. Fortunately, ESG ETFs educate and provide insight for investors.

ETFs are always a good addition to your portfolio. Given the right investments, you can grow your wealth pretty well using ETFs. ESG Rating’s tool lets you gain access to a growing selection of amazing ETFs so don’t pass this by. Mastering this tool will make ETF hunting a lot easier.

  1. S&P Global ESG Screen

S&P publishes its latest ESG solutions, including scores, published on its website as of February 2021.

All investors have access to his ESG data for over 9,200 companies through his website. Each company that’s put on the list has been carefully evaluated using approximately 1,000 data points. This is the most comprehensive analysis ever conducted for all of the tools here and that’s saying a lot.

How does S&P Global rate various companies? It depends on a few portfolio properties.

You can maintain your portfolio by administering industry-specific Corporate Sustainability Assessment (CSA) questionnaires. Data that are collected from participating companies are then analyzed and compared to determine scores and rankings.

Anyone can visit S&P Global to see companies and their performance on environmental, social, and governance issues. The analysis relates to peer group ratings and rankings. Additionally, S&P Global has spider charts for visual data display. Shows company performance.

  1. Refinitiv ESG Scores

Refinitiv makes financial markets and corporate data accessible to clients around the world.

The tool serves as also one of the biggest producers of ESG content which it does use a manual investment process. This can be verified through his 450+ ESG indicators and available data on 10,000 companies worldwide.

You can use the search function to access company reviews on Refinitiv. You can then the company ID (or name) to see its performance score on a scale of 0-100. 0 means bad, 100 means excellent for ESG performance and transparency.

The Refinitiv tool screens various companies using 10 key ESG factors. The assessment, of course, takes into account the environmental, social issues, and corporate governance pillars.

The social dimension addresses human rights, product sustainability, workforce, and community.

This tool also has an environment section. This includes carbon emissions, natural resource use, and eco-friendly product innovation.

  1. Charles Schwab SRI Screen

Private companies also provide SRI and ESG tools, including Charles Schwab. This tool is public. Other individual brokerage firms only consider clients.

Charles Schwab extends the tool with his current ESG data. Its purpose is to help meet the requirements of various investors. Anyone can now determine if a fund meets their ESG investment thresholds using the tool by Charles Schwab. This is possible by checking the portfolio properties. The Charles Schwab SRI Screen uses and compared data for up to five funds. Doing this helps you easily see the differences in each one easily.

The Charles Schwab SRI Screen also lets you filter your search so that you can find more companies that fit your standards. This helps you save time by simplifying the investment process. Also, with this tool, you can be sure that you will get what matches your needs and requirements based on your search criteria.

The strong suit of the Charles Schwab SRI screen is its quick and easy tool that lets you compare companies easily. You don’t need to swap between tabs and make a few more clicks to give side-by-side comparisons between the brands that you have chosen. For that, Charles Schwab becomes very commendable.

Impact Investing Made Easier

For many, impact investing is a hard field of investing to dive into. It can be intimidating for many to start investing based on their ethics and principle. However, the rise of tools like these has made impact investing more accessible than ever. Newcomers and veteran investors alike can benefit from them.

Apart from this, there’s a treasure trove of impact investor communities that can help you out online as well. If you’re pressed for choices and these tools aren’t enough, you can reach out to those communities to ask for more advice on how you should proceed with your investments. It’s always better getting help from those more experienced than you.

What’s even better is the fact that most of these tools are free. You don’t need to go through heavy entry payments to fully use them. You can start giving more value to your investments using these amazing tools. Why not start to build your ethical portfolio today and see where it takes you?