Environmental assessment categories can include a company’s impact on climate change, natural resource use, and waste management and emission management. Social evaluation categories can include a company’s relations with employees and suppliers, product safety and sourcing practices. Governance assessment categories can include governance practices and business ethics, according to the prospectus.
The ESG criteria also consider how a company follows national and international laws and regulations, along with commonly accepted global norms related to ESG matters. The underlying index exclude companies with significant activities in certain controversial businesses, including those involving alcohol, tobacco, nuclear power, gambling, and firearms and other weapons.
Investors can also fill out their equity portfolio with ESG-related ETFs, such as the NuShares ESG Large-Cap Value ETF (BATS: NULV), NuShares ESG Large-Cap Growth ETF (BATS: NULG), NuShares ESG Mid-Cap Value ETF (BATS: NUMV), NuShares ESG Mid-Cap Growth ETF (BATS: NUMG) and NuShares ESG Small-Cap ETF (BATS: NUSC), which screen companies of various market capitalization and asset categories for environmental, social and governance principles.
Financial advisors who are interested in learning more about environmental, social and governance-related strategies can register for the Tuesday, January 16 webcast here.