The best socially responsible (SRI) ETFs

How do I invest in sustainable or socially responsible companies?

Socially responsible investing (SRI) is becoming more and more 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 in social responsibility with ETFs. The major difference between the indices are the excluded industries. This Investment Guide will help you navigate among the peculiarities of SRI indices that vary substantially in their methodologies and SRI ETFs that track them. It will allow you to find the most suitable ETFs for you by ranking them according to your preferences.

0.10% p.a. - 0.30% 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 30/09/19

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

 

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

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

Regional focus of the most important SRI index families for ETFs

Regional focus of SRI ETFs

Source: justETF Research; As of: 20/04/2018

 

Excluded sectors of the most important SRI index families for ETFs

Excluded sectors of SRI ETFs

Source: justETF Research; As of: 20/04/2018

 

Performance of European SRI indices in comparison

 

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 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 alcohol, tobacco, gambling, armaments and firearms, and/or adult entertainment.

 

Methodology of the Dow Jones Sustainability indices

  • Reassessment takes place annually in September
  • Selection of stocks depends on RobecoSAM rating
  • Criteria is social, economic and ecological sustainability
  • Weighted by float-adjusted market capitalisation
  • Excluded sectors: Alcohol, tobacco, gambling, armaments & firearms, adult entertainment

Regional sub-indices of the Dow Jones Sustainability

Dow Jones Sustainability World ex Alcohol, Tobacco, Gambling and others

 

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. Constituent selection is based on data from MSCI ESG Research.

 

Methodology of the MSCI ex Controversial Weapons indices

  • Based on their respective regional parent index
  • Weighted by float-adjusted market capitalisation
  • Excluded sectors: chemical/ biological weapons, cluster bombs, landmines, uranium weapons
 

MSCI SRI indices

MSCI SRI indices captures large and mid-cap stocks across the Developed Markets countries within their respective region. The indices are capitalisation weighted indices that provide exposure to companies with outstanding environmental, social and governance (ESG) ratings. Constituent selection is based on research provided by MSCI ESG Research. Companies, which generate revenue from adult entertainment, alcohol & tobacco, gambling, weaponry, nuclear energy, and genetically modified organisms, are excluded.

 

Methodology of the MSCI SRI indices Factsheet

  • Rebalanced in February, May, August and November
  • Stocks are selected in a best-of-class way within different categories, concerning the social, economic and ecological sustainabilityg
  • Weighted by float-adjusted market capitalisation
  • Excluded sectors: adult entertainment, alcohol & tobacco, gambling, weaponry, nuclear energy, genetically modified organisms

Regional sub-indices of the MSCI SRI

MSCI ACWI SRI 5% Issuer Capped (GBP Hedged)
MSCI ACWI SRI 5% Issuer Capped (USD Hedged)
MSCI EMU SRI 5% Capped
MSCI Emerging Markets SRI 5% Capped
MSCI Emerging Markets SRI S-Series 5% Capped
MSCI Europe SRI 5% Capped
MSCI Europe SRI S-Series 5% Capped
MSCI Japan SRI (EUR Hedged)
MSCI Japan SRI 5% Capped
MSCI Japan SRI S-Series 5% Capped
MSCI Pacific SRI 5% Capped
MSCI UK IMI Extended SRI 5% Capped
MSCI USA SRI
MSCI USA SRI 5% Capped
MSCI World SRI 5% Capped
MSCI World SRI Select

 

Solactive Sustainability indices

The Solactive Sustainability contains the largest companies, measured by free float market capitalisation, that hold the Oekom status “Prime”, and are not involved in abortion, alcohol, oil & coal, embryonic research, furs, gambling, military services of any kind, GMOs, nuclear power, pornography or tobacco. Furthermore, those companies must refrain from animal testing, business malpractice and controversial environmental practices, and they, and their suppliers/subcontractors have to respect labour and human rights.

 

Methodology of the Solactive Sustainability indices

  • Contains the largest companies, which hold the Oekom status “Prime”, and are not part of the excluded sectors
  • Weighted by float-adjusted market capitalisation
  • Contained companies and their suppliers satisfy high moral standards
  • Single stocks are capped at 10% weight
  • Excluded sectors: alcohol, oil & coal, embryonic research, furs, gambling, military services of any kind, GMOs, nuclear power, pornography, tobacco
 
 

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 GBP
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI Europe SRI UCITS ETF (Acc)IE00B52VJ196 700 0.30% p.a. Accumulating Ireland Optimized sampling
UBS ETF (LU) MSCI EMU Socially Responsible UCITS ETF (EUR) A-disLU0629460675 655 0.28% p.a. Distributing Luxembourg Full replication
iShares MSCI EMU ESG Screened UCITS ETF EUR (Acc)IE00BFNM3B99 606 0.12% p.a. Accumulating Ireland Optimized sampling
L&G Europe ex UK Equity UCITS ETFIE00BFXR5V83 86 0.10% p.a. Accumulating Ireland Sampling
iShares MSCI Europe ESG Screened UCITS ETF EUR (Acc)IE00BFNM3D14 61 0.12% p.a. Accumulating Ireland Optimized sampling
Amundi Index MSCI Europe SRI UCITS ETF DR (C)LU1861137484 62 0.18% p.a. Accumulating Luxembourg Full replication
Xtrackers ESG MSCI Europe UCITS ETF 1CIE00BFMNHK08 18 0.20% p.a. Accumulating Ireland Full replication
Invesco MSCI Europe ESG Universal Screened UCITS ETF AccIE00BJQRDL90 13 0.16% p.a. Accumulating Ireland Optimized sampling
iShares MSCI EMU ESG Screened UCITS ETF EUR (Dist)IE00BFNM3C07 11 0.12% p.a. Distributing Ireland Optimized sampling
iShares MSCI Europe ESG Enhanced UCITS ETF EUR (Dist)IE00BHZPJ676 7 0.15% p.a. Distributing Ireland Optimized sampling
iShares MSCI Europe ESG Screened UCITS ETF EUR (Dist)IE00BFNM3F38 7 0.12% p.a. Distributing Ireland Optimized sampling
Lyxor MSCI EMU ESG Trend Leaders (DR) UCITS ETF - AccLU1792117340 7 0.20% p.a. Accumulating Luxembourg Full replication
iShares MSCI EMU ESG Enhanced UCITS ETF EUR (Dist)IE00BHZPHZ28 2 0.15% p.a. Distributing Ireland Optimized sampling

Source: justETF.com; As of 15/10/19

 

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.

Source: justETF.com; As of 30/09/19; Calculations in GBP including dividends