The ESG theme is also growing in popularity in the investment community, especially among the maturing millennial demographic. Farris pointed out that over half of investors would put all of their investments in responsible investments and this percentage is much higher among millennials. Investor participation in responsible investments also increased to 49% in 2017 from 34% in 2015.
Potential investors interested in the ESG investment theme may consider Nuveen’s relatively new suite of ETFs, which covers a comprehensive mix of domestic equity, international equity and fixed income options.
For instance, the NuShares ESG U.S. Aggregate Bond ETF (NYSEArca: NUBD) helps fixed-income investors pair their bond investment needs with environmental, social and governance principles.
Investors can also fill out their equity portfolio with U.S. 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.
Lastly, the NuShares ESG International Developed Markets Equity ETF (BATS: NUDM) and NuShares ESG Emerging Markets Equity ETF (BATS: NUEM) also align investors’ international equity investments with their values.
Nuveen’s ESG ETF methodology follows four key components, including ESG rating or captures an issuer’s performance on key ESG risks relative to peers;, controversy score or an issuer’s exposure and response to event-driven controversies; controversial business involvement or issuer’s activity in industries that may cause significant social harm like tobacco; and low carbon criteria or the carbon intensity of an issuer based on involvement in certain industries.
Financial advisors who are interested in learning more about environmental, social and governance-related strategies can watch the webcast here on demand.