ESG stocks to invest responsibly

This list of companies aims to capture the returns of stocks that meet environmental, social, and governance criteria based on MSCI ratings. These criteria, represented by the acronym ESG, constitute the three pillars of extra-financial analysis.

The companies selected are those with sufficient size and liquidity, solid fundamentals at a minimum, and who meet ESG criteria. MSCI's ESG scores are designed to measure, transparently and objectively, a company's relative ESG performance, commitment, and effectiveness across a range of metrics grouped into 10 main themes and 33 key topics based on publicly available data.

The environmental criterion takes into account a company's commitment and effectiveness in reducing environmental emissions in its production and operational processes, its ability to reduce environmental charges and costs for its clients, as well as its capacity to reduce the use of materials, energy, and water to improve the management of its supply chain.

The social criterion considers a company’s commitment to being a good corporate citizen, protecting public health, respecting business ethics and human rights, its ability to produce goods and services of high quality that ensure customer safety and data confidentiality, as well as its commitment to diversity and employee satisfaction at work.

The governance criterion assesses the company’s practices in communicating its CSR strategy, the management’s commitment to following good governance practices, and the company’s effectiveness in treating its shareholders fairly.

These criteria are then weighted by a controversial rating calculated based on ESG-related controversies. If a scandal occurs during the year, the company involved is penalized, and this affects its final ESG score. The impact of the event can still be observed the following year if there are new developments related to the negative event. For example, lawsuits, legislative disputes, fines, and generally all media-related elements are captured as the controversy progresses. The controversy score also takes into account the capitalization bias suffered by large-cap companies, as they tend to attract more media attention than smaller-cap companies.

Several geographic regions are offered. The global list includes companies listed on the major financial markets around the world. Other lists are regional: North America (United States, Canada), Europe, Asia (Japan, Australia, Singapore, Hong Kong), Emerging Markets, the United Kingdom, France, Germany, Switzerland, the Netherlands, and Italy.