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.

“So what JUST Capital does is we rank the Russell 1000 companies 1 to 1,000 every year according to those metrics…. I don’t know if I want to see a legislative outcome for this. I’d love to see this happen organically,” said Tudor Jones, according to DealBreaker.

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 multi-factor strategies, visit our Smart Beta Channel.