ESG and Sustainable
Published by Radif Partners · Updated
SRI, ESG Leaders, Climate Transition, invest with environmental and social criteria
This page compares 37 funds in the ESG and Sustainable category, with ongoing charges from 0.07% to 0.67% and a median of 0.20%. The gap between the cheapest and the dearest is worth roughly €600 over ten years on €10,000 invested: for a comparable index, that is the most reliable difference between two funds, because it rests on no assumption about markets. 22 of the 37 funds are accumulating and 36 replicate their index by holding its securities, the others using a swap. The largest fund in the list is ESGU, which matters less for returns than for the risk of closure: a fund that stays small usually ends up merged. Past performance is not used to rank this list: over the horizons published it says more about the index being tracked than about how the fund is run.
37
0.28%
+4.9%
0.07%
+25.1%
iShares ESG Aware MSCI USA ETF
iShares MSCI USA ESG Enhanced UCITS ETF USD (Acc)
iShares MSCI World ESG Screened UCITS ETF USD (Acc)
iShares MSCI USA ESG Screened UCITS ETF USD (Acc)
Xtrackers MSCI World ESG UCITS ETF 1C
Vanguard ESG Global All Cap UCITS ETF (USD) Distributing
iShares MSCI World SRI UCITS ETF EUR (Acc)
Xtrackers MSCI USA ESG UCITS ETF 1C
iShares MSCI Europe SRI UCITS ETF EUR (Acc)
iShares MSCI World ESG Screened UCITS ETF USD (Acc)
iShares MSCI USA ESG Select ETF
Amundi MSCI World SRI PAB UCITS ETF DR (C)
iShares MSCI EM SRI UCITS ETF USD (Acc)
iShares MSCI World Small Cap ESG Enhanced UCITS ETF USD (Acc)
iShares MSCI USA SRI UCITS ETF USD (Acc)
iShares Global Clean Energy Transition UCITS ETF USD (Dist)
iShares Global Clean Energy ETF
iShares Global Water UCITS ETF USD (Dist)
iShares EUR Corp Bond 0-3yr ESG UCITS ETF EUR (Dist)
iShares MSCI World Paris-Aligned Climate UCITS ETF USD (Acc)
Xtrackers MSCI Emerging Markets ESG UCITS ETF 1C
Invesco MSCI World ESG Universal Screened UCITS ETF Acc
Amundi PEA US Tech ESG UCITS ETF Acc
BNP Paribas Easy CAC 40 ESG UCITS ETF
iShares MSCI Japan SRI UCITS ETF USD (Acc)
iShares USD Corporate Bond ESG UCITS ETF USD (Dist)
iShares MSCI World Paris-Aligned Climate UCITS ETF USD (Acc)
SPDR S&P US Dividend Aristocrats ESG UCITS ETF (Dist)
iShares MSCI World Low Carbon Target UCITS ETF USD (Dist)
Invesco Solar ETF
L&G Clean Water UCITS ETF
iShares EUR Corp Bond ESG UCITS ETF EUR (Dist)
iShares Electric Vehicles and Driving Technology UCITS ETF USD (Acc)
First Trust NASDAQ Clean Edge Green Energy ETF
Invesco WilderHill Clean Energy ETF
UBS ETF MSCI World Socially Responsible UCITS ETF USD (Acc)
Rize Sustainable Future of Food UCITS ETF
ESG, SRI and Paris-Aligned: what each label actually filters
Sustainable funds do not filter to the same degree, and the gap is wide. An ESG Screened index removes only controversial weapons, tobacco, thermal coal above a threshold, and companies in severe breach of the Global Compact principles: it keeps more than ninety per cent of the parent index. An SRI index keeps only the best-rated quarter of companies in each sector, which genuinely changes the portfolio. Paris-Aligned and Climate Transition Benchmark indices add an annual carbon-intensity reduction path, imposed by European regulation, that constrains the composition year after year.
Two consequences follow. First, performance: a light filter tracks the parent index closely, while an SRI filter diverges by several points a year, in both directions, because it concentrates the portfolio in fewer names and shifts the sector balance. Second, the fit between a fund's name and its contents: an SFDR article 8 or 9 classification tells you about the manager's disclosure duties, not about the severity of the filter. To learn what a fund really excludes, the only sources are the index methodology published by the provider and the full list of holdings.
What the funds in this category show
Where the money actually sits
The category holds 37 funds and 130.9B in combined assets, and those assets are not spread evenly. iShares ESG Aware MSCI USA ETF (ESGU), run by iShares, holds 17.9B on its own, and the three largest, iShares ESG Aware MSCI USA ETF (ESGU), iShares MSCI USA ESG Enhanced UCITS ETF USD (Acc) (USEA) and iShares MSCI World ESG Screened UCITS ETF USD (Acc) (WLDS), account for 31.1 % of the total. At the other end, Rize Sustainable Future of Food UCITS ETF (FOOD) manages only 57M. Size is no guarantee of quality, but it decides two very concrete things: the spread between buying and selling price you pay on every order, and the odds that the fund still exists in ten years.
The fee gap, in money
Ongoing charges run from 0.07 % for iShares MSCI USA ESG Enhanced UCITS ETF USD (Acc) (USEA) to 0.67 % for Invesco Solar ETF (TAN), a gap of 0.60 points, against a category average of 0.28 %. On £10,000 held for ten years that gap is roughly 600 in extra charges, before counting the return that money would itself have earned. It is the one variable in the comparison known in advance: past performance does not repeat, fees repeat every year.
Two funds in one category do not hold the same basket
The 37 funds listed track 36 different indices, among them MSCI USA Extended ESG Focus, MSCI USA ESG Enhanced Focus CTB, MSCI World ESG Screened and MSCI USA ESG Screened. The largest tracks MSCI USA Extended ESG Focus. That spread is why two funds filed under the same theme can differ by several points over a year: they hold different securities, weight them differently and rebalance on different dates. Each fund page names its index, and that is where a serious comparison starts.
Replication and domicile
36 funds hold the constituents of their index directly, 1 use a swap, including Amundi PEA US Tech ESG UCITS ETF Acc (PUST) from Amundi. Synthetic replication often tracks more closely and reaches markets that are hard to hold directly, at the price of a counterparty risk that is regulated but real. Physical replication is easier to understand and allows securities lending, which earns the fund income and adds its own risk.
28 of the 37 funds are domiciled in IE, the rest in US, FR and LU. Domicile sets the withholding tax the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return, and it also sets your own tax treatment depending on where you live.
Accumulate or take the income
22 funds accumulate dividends, 15 pay them out. The largest accumulating share class is iShares MSCI USA ESG Enhanced UCITS ETF USD (Acc) (USEA), the largest distributing one iShares ESG Aware MSCI USA ETF (ESGU). The choice is not about yield, both versions of the same index return the same before tax, but about tax and discipline: the accumulating class reinvests with no cost and no decision, the distributing class pays income that is taxable in the year it arrives.
Age and critical size
The oldest fund in the category, BNP Paribas Easy CAC 40 ESG UCITS ETF (ESGE), launched on 2005-01-14, giving 21 years of history, and the newest, Xtrackers MSCI Emerging Markets ESG UCITS ETF 1C (XMEM), on 2022-12-14. A long record shows how the fund behaved in a fall, which no one-year number can. A fund launched two years ago has lived through a single market regime.
1 of the 37 funds manage under 100 million, among them Rize Sustainable Future of Food UCITS ETF (FOOD). Below that level a fund rarely pays for its issuer, and a closure forces a sale on the issuer's timetable rather than yours, with capital gains tax along the way.
Frequently asked questions
What are ESG ETFs?
ESG ETFs invest in companies that meet Environmental, Social, and Governance criteria. They screen out sectors like fossil fuels, weapons, and tobacco while favoring sustainable business practices. Check the figure in the key information document of the exact share class your broker offers, since two classes of the same fund can differ on charges and on distribution policy.
Do ESG ETFs underperform regular ETFs?
Research shows ESG ETFs perform similarly to conventional ETFs over the long term. Some studies suggest ESG screening can reduce downside risk, though sector exclusions can affect returns in certain market environments. What matters more than the ranking is whether the underlying index suits your horizon and your tolerance for a fall of thirty per cent, which no score can decide for you.
How are ESG scores determined?
ESG scores are assigned by rating agencies like MSCI, Sustainalytics, and S&P. They evaluate companies on environmental impact, social practices, and corporate governance quality. Past performance over these horizons says more about the index than about the fund, which is why the comparison here weighs cost, size and tracking quality instead.
Are ESG ETFs more expensive?
ESG ETFs used to be more expensive, but competition has driven costs down. Top ESG ETFs now have TERs of 0.12-0.25%, comparable to conventional index funds. Over a ten-year horizon the ongoing charge weighs more than any difference in past performance: 0.20% against 0.50% on €10,000 is about €300, compounded.