Introduction

What are the top causes that investors care about? Are fund managers offering funds that align with those causes?

This report compares the causes that investors care about with causes offered by mutual funds and ETFs that describe themselves as ESG (Environmental, Social and Governance), sustainable, or impact funds.

To assess the causes that are most important to investors, the report uses anonymized data from more than 1000 Impact Assessments completed by investors on Ethos.

An Impact Assessment (or values-based assessment) is a questionnaire in which an investor selects the causes that are most important to them. Ethos includes 45 causes, which you can see here.

To assess the causes offered by fund managers, the report maps descriptions of more than 575 ESG and impact-focused mutual funds and ETFs to keywords related to causes (details available in the methodology section).

What are the top causes that investors care about?

We analyzed more than 1000 Impact Assessments taken through Ethos and broke down the top selected causes by investors, based on the percent of all causes selected:

#1: Climate action

Take urgent action to combat climate change and its impacts
Number of assessments selected
650
Percent of assessments selected
62.0%
Percent of causes
16.2%
What this cause is about
renewable energy
clean energy
greenhouse gas emissions
air pollution
climate change
disaster readiness and aid
earth
environment
sustainability
UN Sustainable Development Goal 7
UN Sustainable Development Goal 13
UN Sustainable Development Goal 11

#2: Sustainable resource use

Ensure sustainable consumption and production patterns
Number of assessments selected
487
Percent of assessments selected
46.5%
Percent of causes
11.9%
What this cause is about
waste
recycling
responsible consumption
re-use
natural resources
fossil fuels
conflict minerals
conflict diamonds
sustainability
earth
resources
UN Sustainable Development Goal 12
UN Sustainable Development Goal 11

#3: Gender equality

Achieve gender equality and empower all women and girls
Number of assessments selected
426
Percent of assessments selected
40.6%
Percent of causes
10.4%
What this cause is about
equal pay
equal opportunity
violence against women
sex trafficking
FGM
women's rights
LGBTQ equality
UN Sustainable Development Goal 5

#4: Life on earth

Protect biodiversity and ensure sustainable use of ecosystems
Number of assessments selected
407
Percent of assessments selected
38.8%
Percent of causes
10.1%
What this cause is about
oceans
marine life
sustainable fishing
coral reefs
deforestation
desertification
rainforests
wildlife habitats
poaching
extinction
animal rights
animal testing
puppy mills
biodiversity
earth
UN Sustainable Development Goal 14
UN Sustainable Development Goal 15

#5: Peace and justice

Promote peaceful and inclusive societies, provide access to justice for all
Number of assessments selected
395
Percent of assessments selected
37.7%
Percent of causes
9.7%
What this cause is about
civil rights
minority rights
hate crimes
racism
racial justice
accountable institutions
police violence
police accountability
safety and security
violent conflict
war
displacement
corruption
governance
gun control
weapons sales
school shootings
mass shootings
UN Sustainable Development Goal 16
UN Sustainable Development Goal 10

#6: Inclusive economies

Create inclusive economies with no poverty, decent work for all, and affordable living conditions
Number of assessments selected
371
Percent of assessments selected
35.4%
Percent of causes
9.1%
What this cause is about
poverty
inequality
economic justice
employment
safe work environment
discrimination
sexual harassment
fair wages
living wage
minimum wage
child labor
housing
homelessness
hunger
sustainable economies
UN Sustainable Development Goal 1
UN Sustainable Development Goal 8
UN Sustainable Development Goal 10
UN Sustainable Development Goal 11
UN Sustainable Development Goal 2

#7: Health and well-being

Ensure healthy lives and promote well-being for all at all ages
Number of assessments selected
367
Percent of assessments selected
35.0%
Percent of causes
9.0%
What this cause is about
healthcare
access to healthcare
reproductive rights
maternal health
child health
mental health
diseases
immunization
smoking
global health
public health
COVID-19
coronavirus
UN Sustainable Development Goal 3
UN Sustainable Development Goal 5
UN Sustainable Development Goal 10

#8: Quality education

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
Number of assessments selected
352
Percent of assessments selected
33.6%
Percent of causes
8.6%
What this cause is about
primary school
early childhood education
quality education
secondary education
lifelong learning
achievement gap
arts
culture
music
theater
UN Sustainable Development Goal 4

#9: Water and sanitation

Ensure availability and sustainable management of water and sanitation for all
Number of assessments selected
334
Percent of assessments selected
31.9%
Percent of causes
8.2%
What this cause is about
clean water
safe water
drinking water
sanitation
water use
sustainable farming
access to water
access to sanitation
UN Sustainable Development Goal 6

#10: Innovation

Innovate to foster economic growth and human development
Number of assessments selected
281
Percent of assessments selected
26.8%
Percent of causes
6.9%
What this cause is about
technology
research
entrepreneurship
start-ups
information
open source
freedom of press
data privacy
personal data
data security
cyber-bullying
UN Sustainable Development Goal 9
UN Sustainable Development Goal 8

Climate Action was by far the most selected cause, with more than 6 out of every 10 investors selecting it in their assessment.

Three out of four of the top causes are environment related, including Sustainable resource use and Life on earth.

Social causes have historically taken a back seat in ESG investing to environmental causes; our data shows that both Gender equality and Peace and justice (which includes racial justice) are in high demand among investors. Both reflect widespread social movements that have grown in awareness and urgency in recent years.

Ethos also tracks sub-causes within the above causes (you can see all causes on Ethos here).

These are the most selected sub-causes:

What are the top causes covered by ESG and impact funds?

Are fund managers offering mutual funds and ETFs that align with the causes that investors care about?

We assessed ~575 ESG and impact-focused mutual funds and ETFs to determine the causes they focus on. The funds include a broad mix of asset classes, market caps, and geographies.

To determine the causes that a fund focuses on, we mapped ~110 cause-related keywords to each fund's desciption. Where a fund manager describes a fund with a cause keyword, we marked it as related to that cause.

See more details in the methodology section below.

This is the breakdown of causes that ESG and impact funds focus on, compared to the causes desired by investors:

Cause % of fund causes % of investor causes Difference
1. Climate action 22.6% 16.2% 6.4%
2. Sustainable resource use 8.2% 11.9% -3.7%
3. Gender equality 7.2% 10.4% -3.2%
4. Life on earth 7.2% 10.1% -2.9%
5. Peace and justice 9.5% 9.7% -0.2%
6. Inclusive economies 8.9% 9.1% -0.2%
7. Health and well-being 8.2% 9.0% -0.8%
8. Quality education 4.9% 8.6% -3.7%
9. Water and sanitation 11.5% 8.2% 3.3%
10. Innovation 11.8% 6.9% 4.9%

% of fund causes: Percent of total fund causes mapped to ~575 ESG funds
% of investor causes: Percent of total causes selected by investors
Difference: Difference between percentage of fund causes and investor causes

Climate-focused funds dominate the landscape, with Sustainable resource use (including recycling, waste, and responsible consumption), Quality education, Gender equality , and Life on earth the most underserved.

Fund managers are close to meeting current demand for Peace and justice , Inclusive economies and Health and well-being.

Fund managers should consider how they can design funds that align with all of the causes that investors care about. Fund products that focus on specific causes that investors care about are more likely to appeal to investors who want to integrate their values and conscience into their investment decisions.

Ethos can help with fund design and impact communication; reach out to us at success@ethosESG.com to learn more.

What are the top funds for each cause?

Ethos rates funds using data such as carbon emissions, pay equity, government fines, and more. You can see our methodology here.

These are some of the top-rated funds on Ethos for the top 5 causes:

Methodology

To assess the top causes that investors care about, we anonymized data from 1000+ Impact Assessments completed by investors on Ethos.

In an Impact Assessment, an investor picks the top causes they care about, then rates from 1 (lowest) to 7 (highest) the importance of sub-causes within those causes.

For example, if an investor picks Climate action as a cause, they would then rate the importance of sub-causes Reduced GHG emissions, Renewable energy and Disaster readiness and aid.

You can see all causes on Ethos here, or take a free Impact Assessment here.

To assess what causes a fund focuses on, we searched fund descriptions for keywords related to each cause.

Where a fund manager describes a fund with the below keywords, we marked it as related to the associated cause:

Cause Keywords
Climate action fossil fuel free, zero fossil fuel, green, climate, carbon, emissions, pollution, greenhouse, earth, emissions, clean energy, renewable energy
Sustainable resource use circular economy, recycling, resources, responsible consumption, re-use, waste, conflict minerals, earth, consumption
Gender equality gender, maternal, me too, equal opportunity, trafficking, violence against women, equal pay, lgbtq, women, female
Life on earth biodiversity, animal, animal rights, terrestrial, forest, earth, extinction, wildlife, rainforest, deforestation, sustainable fishing, marine life, ocean, tree
Peace and justice corruption, peace, justice, civil rights, minority rights, police violence, violent conflict, refugee, war, displacement, racism, racial, discrimination, social justice, mass shootings, gun control, weapons
Inclusive Economies hunger, housing, job creation, labor rights, child labor, homeless, minimum wage, living wage, fair wage, safe work, economic justice, economic equality, economic development, economic disparities, poverty, community, communities
Health and well-being health, well-being, coronavirus, covid, immunization, diseases, reproductive rights, access to healthcare, healthcare, tobacco
Quality education education, theater, music, culture, achievement gap, quality education, secondary education, early childhood education, primary school, arts
Water and sanitation water, clean water, safe water, drinking water, sustainable farming, sanitation
Innovation innovation, data security, data privacy, open source, freedom of press, tech

The ~575 ESG and impact-focused funds were selected from Ethos database to represent a broad mix of asset classes, market caps, and geographies.

Please reach out to us at support@ethosESG.com with any questions or feedback.

About Ethos

Ethos is a first-of-its-kind FinTech platform helping financial advisors, fund managers and institutional investors, and everyday investors align their money with the causes they care about, including racial justice, workplace safety, climate change, LGBTQ equality, and more.

If you are a financial advisor or institution working with Ethos, we help you use the results of a client's Impact Assessment to align the client's portfolio with their causes and report to them on the impact of their portfolio.

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