This selection of companies aims to build a portfolio invested in equities according to a sustainable and socially responsible investment strategy.
This list contains stocks that respect environmental, social and governance criteria based on Refinitiv ratings. These criteria, represented by the acronym ESG, constitute the three pillars of the extra-financial analysis. Companies of sufficient size and liquidity that have at least solid fundamentals and meet ESG criteria are selected. Refinitiv's ESG scores are designed to transparently and objectively measure a company's relative ESG performance, engagement and effectiveness across 500 metrics grouped into 10 main themes (emissions, environmental innovation, resource use, social engagement, human rights, product responsibility, human resources, CSR strategy, management and shareholders) based on published data.
The environmental criterion considers a company's commitment and effectiveness in reducing environmental emissions in its production and operational processes, its ability to reduce environmental burdens and costs for its customers, and its ability to reduce the use of materials, energy and water to improve its supply chain management. The social criterion considers the company's commitment to being a good citizen, protecting public health, respecting business ethics and human rights, its ability to produce quality goods and services that incorporate customer safety and data privacy, and the company's commitment to diversity and employee job satisfaction. The governance criterion checks the company's practices in communicating its CSR strategy, management's commitment to good governance practices and the company's effectiveness in treating its shareholders fairly.
These criteria are then weighted by a controversy rating calculated on the basis of 23 ESG controversy topics. Over the course of the year, if a scandal occurs, the company involved is penalized and this affects its final ESG score. The impact of the event can still be seen the following year if there are new developments related to the negative event. For example, lawsuits, legislative disputes, fines, and overall all media elements are captured as the controversy progresses. The controversy score also takes into account the market capitalization bias that large-cap companies suffer, as they attract more media attention than smaller-cap companies.
Several lists are proposed according to geographical areas. The global list includes companies listed on the world's main financial markets. The other lists are regional: Europe, North America, Asia (Japan, Australia, Singapore, Hong Kong), Emerging Markets, France, Germany, Netherlands, Switzerland and the United Kingdom.