Environmental, Social, and Governance (ESG) analysis tools are a powerful way to measure a company’s performance. It does that against its environmental, social, or governance initiatives.
ESG tools are becoming an essential part of measuring corporate sustainability. Companies now commonly include them in their annual reports.
Also, they disclose ESGs as part of their financial statements.
Table of Contents
- Best-Of by Category
- Best ESG Analysis Tools for Reporting & Screening
- 1. Sustainalytics
- 2. EcoVadis
- 3. As You Sow
- 4. US SIF
- 5. Morningstar ESG Screener
- 6. MSCI ESG Ratings & Climate Search Tool
- 7. ETF.com ESG Ratings
- 8. S&P Global ESG Screen
- 9. Refinitiv ESG Scores
- 10. Charles Schwab SRI Screen
- 11. HESG
- 12. APEX Funds
- Final Verdict
- FAQs
- What are ESG tools?
- What does ESG stand for?
- What is the ESG method?
- Is ESG a marketing tool?
Best-Of by Category
| Category | Product |
|---|---|
| Best For Advanced ESG Analysis | Sustainalytics |
| Best For Sustainable Supply Chain Analysis | EcoVadis |
| Best For Community Impact Analysis | As You Sow |
| Best For Socially Responsible Investing | US SIF |
Best ESG Analysis Tools for Reporting & Screening
There are many different tools to help you analyze ESG data. And each one has its benefits and drawbacks. Some of the most popular ESG investing tools include:
1. Sustainalytics
Sustainalytics offers global environmental, social, and governance (ESG) research and ratings. The company offers many services, including ESG research, ratings, and analysis.
Sustainalytics offers many different tools for ESG investing and analysis, including the Sustainalytics Corporate Ratings Database, Environmental Performance Database, and Social Performance Database.
The Sustainalytics Corporate Ratings Database is a comprehensive data set of ESG ratings for over 9,000 companies. The database includes ratings for environmental, social, and governance performance.
The Sustainalytics Environmental Performance Database contains over 60,000 environmental performance indicators. These are sourced from 9,000 companies.
The database includes energy, emissions, and water use data.
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2. EcoVadis
EcoVadis is a global provider of environmental, social, and governance (ESG) ratings. You can also rely on it for performance analysis. It offers many services, including ESG ratings, sustainability assessments, and supply chain evaluations.
EcoVadis has many different tools, including the EcoVadis Corporate Ratings Database and the EcoVadis Environmental Performance Database, which can be used for ESG analysis.
The EcoVadis Corporate Ratings Database is a comprehensive database of ESG ratings. It covers over 21,000 companies.
The database includes ratings for environmental, social, and governance performance. The EcoVadis Environmental Performance Database has over 200,000 environmental performance indicators from 21,000 companies. The database includes water use, energy use, emissions, and more data.
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3. As You Sow
If you are looking for the best ESG investing tools, consider As You Sow. It provides one of the most comprehensive ESG tools.
ESG investors can determine the social responsibility of over 3,000 shared funds. They can also check how their carbon emissions affect society from the As You Sow website. Depending on the screen you choose to perform a financial analysis on, your fund ratings will be on a scale of A to F.
You will get enough ESG data by scrolling on the page that loads next. It reveals all the ESG metrics you need to know. If the results do not resonate with your values, look for something better.
The As You Sow tool also has a search and filter function. Click on the search funds button on the right side of the navigation bar. You can filter your search results by fund family, category, grade, or performance.
This tool is best for sustainable investing and investment strategy. Through it, you can engage your employer and plan to improve it through sponsorship. It may be the best choice for both individual and institutional investors.
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4. US SIF
US SIF sustainable investment and mutual funds are the preferred tools. It should come first on your list. It is a popular program in the financial industry with renowned financial institutions. Those partnering companies include brokers, investment management companies, and non-profit associates.
US SIF has partners working as a team to discuss sustainable investment practices. It creates investor awareness through charts of sustainable investment mutual funds and ETFs that are publicly available on the website.
This ESG tool can analyze financial performance and offers the best platform for insights into ESG analytics. The US SIF tabs allow you to check different companies. You can view proxy voting records and shareholder activities, which can be helpful in risk analysis and other areas.
This tool allows you to sort data according to financial metrics. The ESG data is displayed on the sustainability accounting standards board. Like all other ESG tools, US SIF allows you to sort the data by type. You can narrow your search on the platform using the ESG factors provided.
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5. Morningstar ESG Screener
This tool shares data with its sister company, Sustainalytics, making it a performance analysis tool. With it, you can search for funds by company name or sticker and refine your search. Choose funds with a sustainability or ESG focus already identified. That is only possible if they have low carbon emissions.
Morningstar Sustainability is rated on a scale of 1-5 globes. Higher globes show funds with more investment in companies with lower ESG risks. That shows how efficient the find is in handling ESG risks compared to peers.
Morningstar’s ESG tool has a Portfolio tab. Here, you can view ESG analytics. The sustainability calculations include the mean ESG score for the past 12 months. This weighted average ranks funds for easier comparison with peers.
Morningstar ESG labels funds as sustainable investments if they meet the criteria. They should have ESG metrics focused on public fillings. Funds that meet this criterion are placed in a group. Options are ESG funds focusing on ESG factors, impact funds, and environmental factor funds.
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6. MSCI ESG Ratings & Climate Search Tool
MSCI lets you search an extensive ESG data set of over 2,900 constituents of investment MSCI ACWI Index. It is easy to use this ESG tool. Type the company name or ticker to compare it with global climate change objectives. You can also view its ESG risks and opportunities.
The implied temperature increase shows your firm’s impact on climate change. That also indicates its alignment with the global warming target.
The tool converts the current and expected carbon emissions from about 10,000 firms to help you discover better ESG investing opportunities.
These are all publicly mentioned firms. However, the conversion depends on the percentage of the carbon budget. From the ESG analytics, you can see the misaligned and aligned companies.
That shows firms emitting low and high carbon gases, respectively. The ESG analytics also reveal the decarbonization target and whether the company achieves it.
You will find the year the mentioned company achieved near-zero carbon emissions. For ESG ratings, firms are assessed and graded based on different ESG issues. MSCI shows the firm lags or leads its peers across the material ESG issues.
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7. ETF.com ESG Ratings
ETF.com ESG Ratings is the best tool for investors researching ESG ETFs. The ESG Tab provides MSCI ESG data for funds depending on the exposure to different ESG factors.
These include carbon emissions, sustainability impact, and governance risks to help you make better decisions during the investment process.
This platform shows the fund’s rating on a scale of AAA-CCC and its quality ESG score out of 10. The ETF EST analytics gives the percentage of the fund’s peers with ESG scores lower or equal to the fund in question.
Besides that, it provides a global position compared to all funds from MSCI data sources. This will allow you to see how well your firm ranks.
It is easy to find ESG ETFs using this tool, but the investor’s research should not stop at that point. This is the only platform where you can access the ESG data you need for ESG investing.
Strive to understand how the ETF determines and manages ESG investments and identify the risks involved in ESG. That will encourage safe, sustainable investment. Fortunately, ESG ETF educates investors and provides insights. Check on the ETF Channel tab for more information.
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8. S&P Global ESG Screen
S&P has released its latest ESG solutions, which include scores. Beginning in February 2021, they will be publicly available on the website.
All investors can access ESG data on over 9,200 companies from the website. Every company on the list was carefully evaluated on about 1,000 data points. It is the most extensive analysis ever done.
How does S&P Global check different companies? It relies on the portfolio characteristics.
It gets the portfolio by administering the Corporate Sustainability Assessment (CSA) industry-specific questionnaire. The data collected from the participating companies are analyzed and compared to give the scores and ranks.
Anyone can access S&P Global to view any company’s performance on environmental, social, and governance issues. The analysis is relative to the scores and rankings of peer groups.
Additionally, S&P Global has a spider chart for visual data presentation. It indicates the company’s performance.
The performance is relative to the rivals on different ESG metrics for reporting. These include climate strategies, labor practices, talent acquisitions, and talent attraction to help you correctly invest your financial and human capital.
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9. Refinitiv ESG Scores
Refinitiv provides financial markets and company data to clients worldwide. It is also one of the largest ESG content collection companies using manual investment processes. This is verifiable through data from over 450 ESG metrics and 10,000 companies worldwide.
You can access the company’s score on Refinitiv through its search function. Type the company identity and name to view the performance score on a scale of 0 to 100. 0 means poor, and 100 means excellent relative to ESG performance and transparency.
The Refinitiv tool checks different firms using ten main ESG factors. The assessment considers the environmental, social, and governance pillars.
The social aspect examines human rights, product sustainability, workforce, and community. The tool also has an environmental section covering carbon emissions, natural resource usage, and environmental product innovation.
Refinitiv shows the company’s ESG data. The page is updated based on the portfolio characteristics deduced from the corporate annual reports. It refreshes product scores every week.
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10. Charles Schwab SRI Screen
Private firms also offer SRI and ESG tools, and Charles Schwab is one of them. This tool is available to the public. However, other individual brokerage companies only consider their clients.
Charles Schwab enhances its tool with up-to-date ESG data to meet the needs of different investors. Everyone can now identify if a fund meets the ESG investing thresholds by checking its portfolio characteristics. Charles Schwab SRI Screen compares data of up to five funds. This helps you find what suits your needs and identify ESG risks.
Charles Schwab SRI Screen allows you to narrow your search and better define the scope. It saves time by simplifying the investment process. This tool also ensures you get what matches your search criteria.
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11. HESG
The HESG gap analysis tool allows hydropower proponents to identify gaps and maintain good international industry practices. HESG offers an action plan.
The multi-stakeholder hydropower sustainability assessment council governs this tool. It operates according to the new Environmental and Social Framework.
HESB also follows IFS Environmental and Social Performance Standards. The HESG looks into 12 performance criteria, including the following:
- Environmental and Social Assessment and Management
- Communications and Consultation
- Hydrological Resource
- Climate Change Mitigation and Resilience
- Water Quality and Sediments
- Community Impacts and Infrastructure Safety
- Labor and Working Conditions
- Governance and Procurement
- Resettlement
- Biodiversity and Invasive Species
- Indigenous Peoples
- Cultural Heritage
HESG is the best option for investors in the renewable energy industry. It helps identify gaps and risks related to hydropower and good environmental practices.
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12. APEX Funds
Apex Funds is an ESG fund service provider. It helps challenged clients understand investments and business.
It focuses on ESG pillars to measure and determine the sustainability and environmental impact. Apex Fund gives you a true and accurate assessment that you may not access in the private markets.
Understanding ESG ratings is becoming increasingly important for success. Demand and pressure from investors, employees, and customers are mounting.
It will test your ability to reduce risks and achieve returns that require a different approach. APEX Fund is here to help.
The ESG rating services help investors unlock their potential and lead the transformation. Apex uses ESG data and insights to enhance ESG performance.
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Final Verdict
ESG investing tools are made to benchmark environmental performance against leading global companies. They have business platforms.
These tools help you check and report your environmental, social, and governance performance. We have highlighted the most reputable tools for that purpose so you can make your choice depending on your needs.
FAQs
What are ESG tools?
ESG tools are software programs or platforms designed to help investors and stakeholders evaluate a company’s performance based on environmental, social, and governance (ESG) factors. These tools use a variety of data sources and analysis techniques to provide insights into a company’s sustainability and social responsibility practices, management practices, and overall governance structure.
ESG tools are becoming increasingly important as investors seek to understand the long-term risks and opportunities associated with companies’ ESG practices and strive to improve their sustainability and social responsibility performance.
What does ESG stand for?
ESG stands for Environmental, Social, and Governance. It is a set of criteria used to evaluate a company’s performance in these three areas. ESG factors are increasingly important to investors, who use them to assess a company’s sustainability and long-term financial performance.
What is the ESG method?
The ESG method is a framework for evaluating companies based on environmental, social, and governance factors. Investors and stakeholders use this method to assess a company’s sustainability and ethical impact. ESG factors include a company’s carbon footprint, labor practices, board diversity, etc.
Is ESG a marketing tool?
ESG (Environmental, Social, and Governance) is not a marketing tool. It is a framework companies use to evaluate their sustainability and ethical practices. ESG factors are increasingly important to investors and stakeholders in assessing a company’s long-term financial performance and impact on society and the environment.
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Kyle Kroeger, esteemed Purdue University alum and accomplished finance professional, brings a decade of invaluable experience from diverse finance roles in both small and large firms. An astute investor himself, Kyle adeptly navigates the spheres of corporate and client-side finance, always guiding with a principal investor’s sharp acumen.
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