The University of California, San Diego, and the nonprofit sustainable-investing advocacy group As You Sow concluded that the linguistic patterns found in mutual fund and ETF prospectus language they reviewed has a relatively low correlation with its ESG rating. The collaborating teams spent four months analyzing 94 mutual funds and ETFs with “ESG” in their name.
“We see funds with ESG in their names getting F’s on our screening tools because they hold dozens of fossil fuel-extraction companies and coal-fired utilities,” said As You Sow CEO Andrew Behar.