The best socially responsible (SRI) ETFs

How do I invest in sustainable or socially responsible companies?

Socially responsible investing (SRI) is becoming increasingly popular. The idea is that ecologically and socially responsible management makes a company sustainable and ensures sustainable returns on investment.

There are several indices available to invest socially responsible with ETFs. These may differ considerably in terms of their general approach so that not all indices are equally well suited to you and your personal and ethical objectives.

For example, climate change indices focus on fulfilling regulatory requirements to reduce greenhouse gases, which makes the corresponding ETFs highly sought after by institutional investors. By contrast, indices on electric mobility, clean energy and water are particularly interesting for investors who want to achieve outperformance with thematic investments in megatrends.

That also leaves an important space for ETFs and indices that have a broader scope and typically use more stringent selection criteria. Such indices are a good fit for investors with ethical and ecological convictions. In the following, we describe the differences between the various wide-ranging sustainable indices and rank the best available ETFs for you.

0.12% p.a. - 0.42% p.a.
annual total expense ratio (TER) of socially responsible (SRI) ETFs for Europe
on socially responsible investing (SRI) for Europe, which are tracked by ETFs
on socially responsible investing (SRI) for Europe
The best indices for socially responsible (SRI) ETFs for Europe

The best socially responsible (SRI) ETF for Europe by 1-year fund return as of 30/09/20

All socially responsible (SRI) ETFs for Europe ranked by fund return

 

The largest socially responsible (SRI) ETF for Europe by fund size in CHF

All socially responsible (SRI) ETFs for Europe ranked by fund size

 

The cheapest socially responsible (SRI) ETF for Europe by total expense ratio

All socially responsible (SRI) ETFs for Europe ranked by total expense ratio

 
 

SRI indices compared

Excluded sectors of the most important SRI index families

Excluded sectors of SRI ETFs

*Further exclusion in subindex

Source: justETF Research; As of: 31/08/2020

 

Performance of European SRI indices in comparison

Source: justETF Research; As of: 20/10/20

 

STOXX ESG-X indices

The STOXX ESG-X indices are characterised by low cost and broad market coverage. These benefits result from a rather straightforward ESG-scanning method, using standard norm- and product-based exclusions that aim to limit market and reputational risks. Based on data from the ESG rating company Sustainalytics, STOXX ESG-X indices exclude companies involved in the production of tobacco, fossil fuels or controversial weapons and companies that violate the principles of the United Nations Global Compact. The remaining securities are weighted by their free float-adjusted market capitalisation.

 

Methodology of the STOXX ESG-X indices Factsheet Methodology

  • based on their respective regional parent index
  • weighted by float-adjusted market capitalisation
  • excluded sectors and companies: controversial weapons, fossil fuels, tobacco, non-compliance with UN Global Compact

Sustainable indices on Europe provided by STOXX

Sustainable indices on Europe provided by STOXX

 

Dow Jones Sustainability indices

Dow Jones Sustainability indices are designed to measure the stock performance of the leading sustainable companies of their respective region, identified by the investment company RobecoSAM through an annual corporate sustainability assessment. The indices represent their respective portion of the global parent index. The index excludes companies that generate revenue from nuclear energy, alcohol, tobacco, gambling, armaments and firearms, and/or adult entertainment.

 

Methodology of the Dow Jones Sustainability indices Factsheet Methodology

  • reassessment takes place annually in September
  • selection of stocks depends on RobecoSAM rating
  • criterion: social, economic and ecological sustainability
  • weighted by float-adjusted market capitalisation
  • excluded sectors: nuclear energy, alcohol, tobacco, gambling, armaments & firearms, adult entertainment

European sub-indices of the Dow Jones Sustainability

All Dow Jones Sustainability indices on Europe

 

FTSE ESG Low Carbon Select indices

The FTSE ESG Low Carbon Select indices aim to reduce carbon emissions and fossil fuel consumption by 50% each and to improve the ESG rating by 20%, compared to the respective parent index. Companies that are involved in weapons, tobacco, thermal coal, nuclear power or that violate the principles of the UN Global Compact are generally excluded.

 

Methodology of the FTSE ESG Low Carbon Select indices Factsheet Methodology

  • index is reviewed annually in March; quarterly review of the exclusion list
  • weighted by float-adjusted market capitalisation
  • general exclusions as well as exclusions via an optimisation scheme
  • generally excluded sectors and companies: weapons, tobacco, thermal coal, nuclear power, non-compliance with UN Global Compact
  • climate protection target: reduction of carbon emissions and fossil fuel consumption by 50% (compared to parent index)
  • ESG target: improvement of ESG rating by 20% (compared to parent index)

European sub-indices of the FTSE ESG Low Carbon Select

All FTSE ESG Low Carbon Select indices on Europe

 

MSCI Climate Change ESG Select indices

The MSCI Climate Change ESG Select indices evaluate and weight companies from the respective parent index by their impact on climate change. Companies are assessed according to their carbon emissions and climate-friendly companies are given greater weighting in the index. An additional ESG filter excludes companies that are involved in controversial weapons, tobacco, thermal coal, unconventional oil and gas production or nuclear power or that violate the standards of the UN Global Compact.

 

Methodology of the MSCI Climate Change ESG Select indices

  • based on their respective regional parent index
  • titles are weighted according to their impact on climate change: climate-friendly companies are given a greater weight
  • index is reviewed semi-annually (not in parallel with parent index)
  • excluded sectors and companies: controversial weapons, tobacco, thermal coal, unconventional oil and gas production, nuclear power, non-compliance with UN Global Compact
 

MSCI ESG Enhanced Focus indices

The MSCI ESG Enhanced Focus indices are characterised by low cost and broad market coverage. These benefits result from a rather straightforward ESG-scanning method. Rather than evaluating companies individually, the MSCI ESG Enhanced Focus indices simply exclude certain sectors and firms. This applies to companies that produce weapons, thermal coal or tobacco or that violate the principles of the UN Global Compact. The indices are designed to maximise exposure to positive ESG factors while reducing the carbon equivalent exposure to carbon dioxide and other greenhouse gases as well as their exposure to potential emissions risk of fossil fuel reserves by 30% (compared to the parent index). Positive ESG exposure is achieved via optimisation of the index construction: companies with high (low) ESG Ratings are over-weighted (under-weighted).

 

Methodology of the MSCI ESG Enhanced Focus indices Factsheet Methodology

  • based on their respective regional parent index
  • weighted by ESG-criteria: over-weight (under-weight) companies with high (low) ESG Ratings
  • target 30% reduction in carbon exposure compared with parent index
  • excluded sectors and companies: weapons, thermal coal, tobacco, non-compliance with UN Global Compact

European sub-indices of the MSCI ESG Enhanced Focus

All MSCI ESG Enhanced Focus indices on Europe

 

MSCI ESG Leaders indices

The MSCI ESG Leaders indices aim for companies that have the highest environmental, social and governance (ESG) rated performance in each sector of the parent index while excluding companies involved in severe controversies. The MSCI ESG Leaders indices target a 50% sector representation vs. the parent index. Sub-indices belonging to the MSCI Select ESG Rating and Trend Leaders series rate companies not only on the basis of their current ESG profile but also according to how that profile develops over time. Companies which are involved in weapons, alcohol, gambling, tobacco or nuclear power are generally excluded. The same applies to companies that do not comply with the principles of the UN Global Compact. The selected securities are weighted by their free float-adjusted market capitalisation.

 

Methodology of the MSCI ESG Leaders indices Factsheet Methodology

  • based on their respective regional parent index
  • best-in-class approach – the indices select the 50% highest ESG-rated companies in each sector of the parent index
  • excluded sectors and companies: weapons, alcohol, gambling, tobacco, nuclear power, non-compliance with UN Global Compact
  • MSCI Select ESG Rating and Trend Leaders indices take into account not only the ESG profile itself but also its development
  • weighted by float-adjusted market capitalisation

European sub-indices of the MSCI ESG Leaders

All MSCI ESG Leaders indices on Europe

 

MSCI ESG Screened indices

The MSCI ESG Screened indices are characterised by low cost and broad market coverage. These benefits result from a fairly straightforward ESG-scanning method. Rather than evaluating companies individually, the MSCI ESG screened indices incorporate exclusions of specific sectors as a whole. Companies that are involved in weapons, tobacco, thermal coal, or oil sands are excluded from the indices. Furthermore, companies that fail to comply with the United Nations Global Compact principles are excluded. The remaining securities are weighted by their float-adjusted market capitalisation.

 

Methodology of the MSCI ESG Screened indices Factsheet Methodology

  • based on their respective regional parent index
  • weighted by float-adjusted market capitalisation
  • excluded sectors and companies: weapons, tobacco, thermal coal, oil sands, non-compliance with UN Global Compact

European sub-indices of the MSCI ESG Screened

All MSCI ESG Screened indices on Europe

 

MSCI ESG Universal indices

The MSCI ESG Universal indices are characterised by low cost and broad market coverage. These benefits result from a fairly straightforward ESG-scanning method. By default, the MSCI ESG Universal indices exclude only companies found to be in violation of international norms as defined by the UN Global Compact (e.g., facing very severe controversies related to human rights, labour rights or the environment) and companies involved in controversial weapons. Some sub-indices add further controversial sectors to this spectrum. The MSCI ESG Universal indices enhance exposure to companies which feature both a high ESG Rating and a positive ESG trend over the most recent 12 months by increasing the weight of these companies. By contrast, the weightings of companies who lag behind their industry peers in terms of ESG quality are reduced.

 

Methodology of the MSCI ESG Universal indices Factsheet Methodology

  • based on their respective regional parent index
  • weighted by ESG-criteria: over-weight (under-weight) companies with high (low) ESG Ratings
  • ESG-related improvements by companies are taken into account
  • exclusion of companies that fail to comply with the UN Global Compact or that are involved in controversial weapons
  • some sub-indices feature additional exclusions

European sub-indices of the MSCI ESG Universal

All MSCI ESG Universal indices on Europe

 

MSCI ex Controversial Weapons indices

The MSCI Controversial Weapons indices are based on their respective regional parent index and follow the same methodology. The MSCI ex Controversial Weapons indices, however, exclude companies from the parent index that are involved with the production of cluster bombs, landmines, chemical and biological weapons and depleted uranium weapons. The remaining securities are weighted by their float-adjusted market capitalisation.

 

Methodology of the MSCI ex Controversial Weapons indices

  • based on their respective regional parent index
  • weighted by float-adjusted market capitalisation
  • excluded companies: chemical/ biological weapons, cluster bombs, landmines, uranium weapons
 

MSCI SRI indices

The MSCI SRI indices aim for companies that have the highest environmental, social and governance (ESG) rated performance in each sector of the parent index and target a 25% representation of each sector’s market cap. Companies whose products have negative social or environmental impacts and companies associated with severe controversies are excluded. This applies to companies that are involved in weapons, adult entertainment, alcohol, tobacco, gambling, genetically modified organisms, nuclear power, or thermal coal. Companies that fail to comply with the UN Global Compact principles are excluded as well. Accordingly, the SRI series features the strictest exclusion criteria of all socially responsible MSCI indices. Some sub-indices further tighten the selection criteria with regard to climate protection (S-Series, Low Carbon SRI Leaders, SRI Select Reduced Fossil Fuels). The selected securities are weighted by their free float-adjusted market capitalization.

 

Methodology of the MSCI SRI indices Factsheet Methodology

  • based on their respective regional parent index
  • best-in-class approach – the indices select the 25% highest ESG-rated companies in each sector of the parent index
  • excluded sectors and companies: weapons, adult entertainment, alcohol, tobacco, gambling, genetically modified organisms, nuclear power, thermal coal, non-compliance with UN Global Compact
  • strictest exclusion criteria of all socially responsible MSCI indices
  • some sub-indices feature additional selection criteria with regard to climate protection (S-Series, Low Carbon SRI Leaders, SRI Select Reduced Fossil Fuels).
  • weighted by float-adjusted market capitalisation

European sub-indices of the MSCI SRI

All MSCI SRI-Indizes on Europe

 

Solactive Core indices

The Solactive Core indices are based on their respective regional parent index from the Solactive Global Benchmark Series but feature additional ESG-related exclusions. Companies that are involved in the production of controversial weapons or that have violated the principles of the UN Global Compact over a period of three years are excluded. The same applies to pure coal mining companies. The Solactive Core indices are characterised by very low cost, which is achieved by the relatively simple method of ESG implementation. The selected securities are weighted by their free float-adjusted market capitalisation.

 

Methodology of the Solactive Core indices

  • index adjustment takes place quarterly in February, May, August and November
  • excluded sectors and companies: controversial weapons, pure coal mining, non-compliance with UN Global Compact
  • weighted by float-adjusted market capitalisation
 
 

Socially responsible (SRI) ETFs for Europe in comparison

The most important factors at a glance

When choosing a socially responsible (SRI) ETF one should consider several other factors in addition to the methodology of the underlying index and performance of an ETF. For better comparison, you will find a list of all socially responsible (SRI) ETFs for Europe with details on size, cost, age, income, domicile and replication method ranked by fund size.

Compare all socially responsible (SRI) ETFs for Europe in detail
Compare all socially responsible (SRI) ETFs for Europe in a chart

Provider
ISIN
  Fund size
in m CHF
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI Europe SRI UCITS ETF (Acc)IE00B52VJ196 2,119 0.20% p.a. Accumulating Ireland Optimized sampling
Lyxor MSCI Europe ESG Leaders (DR) UCITS ETF - AccLU1940199711 951 0.20% p.a. Accumulating Luxembourg Full replication
iShares MSCI EMU ESG Screened UCITS ETF EUR (Acc)IE00BFNM3B99 949 0.12% p.a. Accumulating Ireland Optimized sampling
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (EUR) A-disLU0629460675 922 0.28% p.a. Distributing Luxembourg Full replication
BNP Paribas Easy Low Carbon 100 Europe UCITS ETFLU1377382368 873 0.30% p.a. Accumulating Luxembourg Full replication
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (EUR) A-accLU0950674761 648 0.28% p.a. Accumulating Luxembourg Full replication
iShares MSCI Europe ESG Screened UCITS ETF EUR (Acc)IE00BFNM3D14 438 0.12% p.a. Accumulating Ireland Optimized sampling
iShares MSCI Europe SRI UCITS ETF EUR (Dist)IE00BGDPWW94 308 0.20% p.a. Distributing Ireland Optimized sampling
iShares Dow Jones Eurozone Sustainability Screened UCITS ETF (DE)DE000A0F5UG3 150 0.42% p.a. Distributing Germany Full replication
iShares MSCI Europe ESG Enhanced UCITS ETF EUR (Acc)IE00BHZPJ783 99 0.12% p.a. Accumulating Ireland Optimized sampling
Xtrackers MSCI Europe ESG UCITS ETF 1CIE00BFMNHK08 94 0.20% p.a. Accumulating Ireland Full replication
iShares MSCI EMU ESG Enhanced UCITS ETF EUR (Acc)IE00BHZPJ015 89 0.12% p.a. Accumulating Ireland Optimized sampling
iShares MSCI EMU ESG Screened UCITS ETF EUR (Dist)IE00BFNM3C07 66 0.12% p.a. Distributing Ireland Optimized sampling
SPDR STOXX Europe 600 ESG Screened UCITS ETFIE00BK5H8015 56 0.12% p.a. Accumulating Ireland Optimized sampling
Invesco MSCI Europe ESG Universal Screened UCITS ETF AccIE00BJQRDL90 46 0.16% p.a. Accumulating Ireland Optimized sampling
iShares MSCI Europe ESG Screened UCITS ETF EUR (Dist)IE00BFNM3F38 28 0.12% p.a. Distributing Ireland Optimized sampling
HSBC Europe Sustainable Equity UCITS ETF EURIE00BKY55W78 21 0.15% p.a. Accumulating Ireland Full replication
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (hedged to USD) A-accLU1280300770 16 0.27% p.a. Accumulating Luxembourg Full replication
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (hedged to CHF) A-accLU1273642816 14 0.27% p.a. Accumulating Luxembourg Full replication
iShares Edge MSCI Europe Minimum Volatility ESG UCITS ETFIE00BKVL7D31 12 0.25% p.a. Accumulating Ireland Optimized sampling
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (hedged to CHF) A-disLU1273642907 10 0.27% p.a. Distributing Luxembourg Full replication
UBS ETF (LU) Euro Stoxx 50 ESG UCITS ETF (EUR) A-disLU1971906802 6 0.15% p.a. Distributing Luxembourg Full replication
Lyxor S&P Eurozone Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - AccLU2195226068 3 0.20% p.a. Accumulating Luxembourg Full replication
Lyxor S&P Europe Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - AccLU2198884491 3 0.20% p.a. Accumulating Luxembourg Full replication
Lyxor MSCI Europe Climate Change (DR) UCITS ETF - AccLU2056738490 2 0.15% p.a. Accumulating Luxembourg Full replication

Source: justETF.com; As of 20/10/20

 

Return comparison of all socially responsible (SRI) ETFs for Europe

The table shows the returns of all socially responsible (SRI) ETFs for Europe in comparison. All return figures are including dividends as of month end. Besides the return the reference date on which you conduct the comparison is important. In order to find the best ETFs, you can also perform a chart comparison.

ETF   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
iShares MSCI Europe SRI UCITS ETF EUR (Dist) -0.59% 3.68% 21.52% 0.78% -
iShares MSCI Europe SRI UCITS ETF (Acc) -0.69% 3.64% 21.34% 0.70% 8.30%
Xtrackers MSCI Europe ESG UCITS ETF 1C -0.55% 2.84% 19.57% -1.94% -
Lyxor MSCI Europe ESG Leaders (DR) UCITS ETF - Acc -1.08% 2.55% 19.57% -2.35% -
BNP Paribas Easy Low Carbon 100 Europe UCITS ETF -0.96% 2.81% 19.58% -2.94% 3.16%
Invesco MSCI Europe ESG Universal Screened UCITS ETF Acc -1.13% 3.13% 20.23% -3.03% -
UBS ETF (LU) Euro Stoxx 50 ESG UCITS ETF (EUR) A-dis -2.69% 1.05% 21.28% -4.45% -
iShares MSCI Europe ESG Screened UCITS ETF EUR (Dist) -1.44% 2.43% 18.63% -5.99% -
iShares MSCI Europe ESG Screened UCITS ETF EUR (Acc) -1.55% 2.33% 18.67% -6.08% -
SPDR STOXX Europe 600 ESG Screened UCITS ETF -1.50% 2.25% 19.08% -6.25% -
iShares MSCI Europe ESG Enhanced UCITS ETF EUR (Acc) -1.69% 2.14% 17.98% -6.42% -
iShares MSCI EMU ESG Enhanced UCITS ETF EUR (Acc) -2.42% 1.95% 22.14% -6.60% -
iShares MSCI EMU ESG Screened UCITS ETF EUR (Dist) -2.19% 2.29% 22.02% -6.65% -
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (hedged to CHF) A-dis -3.15% -1.24% 16.81% -6.78% 4.22%
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (hedged to CHF) A-acc -3.18% -1.24% 16.84% -6.79% 4.23%
iShares MSCI EMU ESG Screened UCITS ETF EUR (Acc) -2.27% 2.01% 21.79% -6.83% -
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (EUR) A-acc -2.75% 0.24% 19.68% -6.87% -
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (EUR) A-dis -2.73% 0.23% 19.67% -6.88% -0.42%
iShares Dow Jones Eurozone Sustainability Screened UCITS ETF (DE) -1.79% 2.79% 21.47% -6.89% -6.65%
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (hedged to USD) A-acc -0.88% -3.91% 13.48% -11.67% 8.03%
HSBC Europe Sustainable Equity UCITS ETF EUR -2.49% 1.30% - - -
iShares Edge MSCI Europe Minimum Volatility ESG UCITS ETF -0.51% 2.44% - - -
Lyxor MSCI Europe Climate Change (DR) UCITS ETF - Acc -1.24% 2.37% - - -
Lyxor S&P Europe Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - Acc - - - - -
Lyxor S&P Eurozone Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - Acc -1.82% - - - -
ETF   2020
in %
2019
in %
2018
in %
2017
in %
2016
in %
iShares MSCI Europe SRI UCITS ETF EUR (Dist) -6.12% 25.75% - - -
iShares MSCI Europe SRI UCITS ETF (Acc) -6.23% 25.69% -10.62% 21.08% -0.78%
Lyxor MSCI Europe ESG Leaders (DR) UCITS ETF - Acc -8.42% - - - -
Xtrackers MSCI Europe ESG UCITS ETF 1C -8.83% 24.01% - - -
Invesco MSCI Europe ESG Universal Screened UCITS ETF Acc -9.29% - - - -
BNP Paribas Easy Low Carbon 100 Europe UCITS ETF -9.56% 24.22% -11.03% - -
UBS ETF (LU) Euro Stoxx 50 ESG UCITS ETF (EUR) A-dis -10.33% - - - -
iShares MSCI EMU ESG Enhanced UCITS ETF EUR (Acc) -11.93% - - - -
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (hedged to CHF) A-acc -11.96% 30.13% -8.61% 14.15% 9.54%
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (hedged to CHF) A-dis -11.97% 30.16% -8.66% 14.25% 9.54%
iShares MSCI Europe ESG Screened UCITS ETF EUR (Dist) -12.06% 21.68% - - -
iShares MSCI EMU ESG Screened UCITS ETF EUR (Dist) -12.14% 20.71% - - -
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (EUR) A-acc -12.17% 25.86% -11.53% - -
iShares MSCI Europe ESG Screened UCITS ETF EUR (Acc) -12.27% 21.70% - - -
iShares MSCI Europe ESG Enhanced UCITS ETF EUR (Acc) -12.35% - - - -
iShares MSCI EMU ESG Screened UCITS ETF EUR (Acc) -12.38% 20.84% - - -
SPDR STOXX Europe 600 ESG Screened UCITS ETF -12.48% - - - -
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (EUR) A-dis -12.91% 25.88% -11.54% 25.12% 9.27%
iShares Dow Jones Eurozone Sustainability Screened UCITS ETF (DE) -13.35% 23.80% -14.06% 23.21% 6.41%
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (hedged to USD) A-acc -14.69% 31.97% -4.64% 11.82% -
HSBC Europe Sustainable Equity UCITS ETF EUR - - - - -
iShares Edge MSCI Europe Minimum Volatility ESG UCITS ETF - - - - -
Lyxor MSCI Europe Climate Change (DR) UCITS ETF - Acc - - - - -
Lyxor S&P Europe Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - Acc - - - - -
Lyxor S&P Eurozone Paris-Aligned Climate (EU PAB) (DR) UCITS ETF - Acc - - - - -

Source: justETF.com; As of 30/09/20; Calculations in CHF including dividends