One of the challenges when looking for environmental, social, and governance (ESG) investing initiatives is to differentiate between companies who not only say they’re ESG, but those actually practice ESG. In order to address that issue, Boston-based Massachusetts Pension Reserves Investment Management Board partnered with the state treasurer’s office and MIT’s Sloan School of Management to implement the Aggregate Confusion project.
A Pensions & Investments article described the project’s main goal is to “expand upon the research from MIT Sloan’s Sustainability Initiative ‘to improve the quality of ESG measurement,’ said a news release issued by state Treasurer and MassPRIM Chairwoman Deborah Goldberg.”
“We believe companies that operate with consideration to ESG issues are higher quality investments that make a positive impact in the community and yield better performance over the long term,” Ms. Goldberg said in the release. “This collaboration will improve MassPRIM’s ability to rate a company’s ESG impact by providing us with the most current research and enhanced methods for measuring ESG factors when evaluating investments.”
To learn more about the project, click here.
Get ESG in ETFs
ETF investors looking for plays in ESG can look to funds like the FlexShares STOXX US ESG Impact Index Fund (ESG ). For investors who want ESG exposure, as well as global diversification, can look to the FlexShares STOXX Global ESG Impact Index Fund (ESGG ).
ESG seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the STOXX® USA ESG Impact Index. The underlying index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to ESG characteristics relative to the STOXX® USA 900 Index, a float-adjusted market-capitalization weighted index of U.S.- incorporated companies. Under normal circumstances, the fund will invest at least 80% of its total assets in the securities of the underlying index.
ESGG seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the STOXX® Global ESG Impact Index. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to environmental, social, and governance characteristics relative to the STOXX® Global 1800 Index, a float-adjusted market-capitalization weighted index of companies incorporated in the U.S. or in developed international markets. The fund will invest at least 80% of its total assets in the securities of the index and in ADRs and GDRs based on the securities in the index.