The top holding in the SPDR S&P 500 ESG ETF (EFIV), which is up 35% the past year, is Apple. The company’s stock is up over 80% the past year, and just outperformed recently in earnings and adding environmental, social, and governance (ESG) metrics.

Apple delivered its largest quarter by revenue of all time on Wednesday at $111.4 billion in its first-quarter earnings report for fiscal 2021,” a CNBC article said. “It’s the first time Apple crossed the symbolic $100 billion mark in a single quarter, and sales were up 21% year over year.”

As for EFIV, it seeks to provide investment results that correspond generally to the total return performance of an index that provides exposure to securities that meet certain sustainability criteria (criteria related to ESG factors) while maintaining similar overall industry group weights as the S&P 500 Index.

In seeking to track the performance of the S&P 500 ESG Index, the fund employs a sampling strategy, which means that it is not required to purchase all of the securities represented in the index. Overall, EFIV gives investors:

  • Investment results that, before fees and expenses, correspond generally to the S&P 500 ESG Index.
  • Exposure to an index that is designed to select S&P 500 firms meeting certain sustainability criteria (related to environmental, social, and governance factors) while maintaining similar overall industry group weights as the S&P 500 Index.
  • Potential ESG core exposure, based on its focus on sustainability criteria and comprehensive market coverage of the flagship core S&P 500 Index.

AAPL Chart

An ESG Bonus in Apple

Apple is now adding ESG factors to its executive compensation package. The more ESG, the better executives’ bank accounts will look.

“Apple senior executives are measured on key financial goals when it comes to being awarded among the market’s most lucrative pay packages, such as sales, earnings and valuation growth,” a CNBC article noted. “Now, for the first time, executives at the stock market’s largest company are also going to have a portion of their millions in cash bonus pay linked directly to factors reflecting a fast-changing world of capitalism: environmental, social and governance (ESG) metrics.”

“In 2021, Apple is adding an ESG ‘bonus modifier’ to its cash incentive program which can swing the total bonus payout by 10% — executing on ESG goals can increase the bonus by 10%, while failing to hit ESG targets could cost Apple’s top brass a bonus reduction of the same amount,” the article added.

For more news and information, visit the ESG Channel.