Israeli social investing platform eToro has added environmental, social, and governance (ESG) scores for over 2,700 stocks on its platform, enabling users to consider ESG factors when building their portfolios.
The scores—calculated by combining market news, NGO signals and company-reported information—are provided and rebalanced daily by sustainability data provider ESG Book.
The scoring system is presented through a traffic light system, with assets labeled as green, amber or red based on their overall ESG rating.
The system also flags if more than five percent of a company’s revenues are associated with areas such as adult entertainment, fossil fuels, guns or tobacco.
The launch comes as a recent survey of 10,000 retail investors revealed that 61% consider ESG factors before investing, with 54% viewing environmental performance as most important.
When asked why they assess ESG credentials, 30% see a direct correlation with financial performance, while 25% look to screen out companies with poor scores.
“ESG scores provide our customers access to information about companies not typically accounted for in traditional financial analysis.
Every investor’s decision-making process is different, and ESG scores play a valuable role in putting more knowledge and control in the hands of the customer who wants to factor ESG into their investment thesis,”
said Lule Demmissie, US CEO of eToro.
“Our new partnership with eToro will enable more investors to access high-quality ESG scores for better decision-making, helping to align capital to more sustainable outcomes,”
said Dr Daniel Klier, CEO at ESG Book.