JUST Capital, a nonprofit founded by Paul Tudor Jones that measures and ranks companies on the leading priorities of the American public, has put together the JUST U.S. Large Cap Diversified Index , which acts as the underlying benchmark for the Goldman Sachs JUST U.S. Large Cap Equity ETF (NYSEArca: JUST). JUST is based on the Russell 1000 benchmark and targets companies that score well on environmental, social and governance metrics.
To screen for its ESG-focused components, Just Capital conducts an annual survey taken from the American public and analyzes 120,000 data points across 85 unique metrics to score companies based on how they perform on key issues prioritized by the public. For instance, companies are ranked from worker issues, like providing a living wage and workplace safety; to customer concerns, such as privacy protection and truthful advertising; to environmental impacts, including minimizing pollution and resource efficiency. Companies are ranked by overall score, and the top 50% are selected and weighted by market cap.
The indexing methodology hopes to capitalize on the fact that companies found in the socially responsible index historically pay better, create more jobs, pay fewer fines, give twice as much to charity, emit less greenhouse gas, and have higher return on equity, compared with the rest of the Russell 1000.
For more information on ESG-related investments, visit our socially responsible ETFs category.