- In partnership with ESG Book, the new rating system will provide ESG insights into the world’s largest companies through an easy-to-use traffic light system
- The launch comes as research found that 61% of investors consider ESG before buying a stock, with one in four (25%) wanting to weed out companies with poor ESG scores
- Almost half (54%) of retail investors see environment as the most important element of ESG, followed by governance (33%) and social (12%).
HOBOKEN, NJ, September 21, 2022 /PRNewswire/ — eTorothe Social Investing Network, today announced the launch of ESG scores for over 2,700 stocks on its platform, enabling its users to consider environmental, social and governance factors when constructing their portfolios.
In partnership with ESG Book, a global leader in ESG data and technology, eToro will provide insights into the world’s largest companies via an easy-to-use traffic light system, with assets being flagged as green, yellow or red based on their overall ESG score.
In addition, “business engagement flags”(1) will show if more than 5% of a company’s revenue is associated with any of 13 different areas that some investors may consider ethically problematic, such as: B. Investments in adult entertainment, fossil fuels, weapons or tobacco.
“eToro believes in the power of the ordinary retail investor and we are always adapting our offerings to this growing class of investor.” said Lule DemmissieUS CEO of eToro. “ESG scores give our clients access to information about companies that is typically not considered 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 client wishing to incorporate ESG into their investment thesis.”
The launch comes in the form of a recent survey(2) out of 10,000 retail investors said three in five (61%) sometimes or always consider ESG factors before investing, with nearly half (54%) citing environmental performance as most important, and fewer citing corporate governance (33%) and social issues (12%) prioritize . When asked why they rate ESG credentials, around one in three (30%) see a direct link to financial performance, while 25% try to weed out companies with poor ratings.
Retail investors were also asked about the biggest barrier to adopting an ESG-focused investment strategy. The most common response was that the cost of living crisis is forcing them to focus on the most profitable companies regardless of ESG performance, with one in four (24%) citing this. Slightly fewer (22%) say greenwashing concerns are a barrier, while 20% are concerned about the lack of standardization of ESG scores.
The study found a disparity in attitudes towards ESG across age groups, with the youngest investors (18-34) being much more likely (40% vs. 12%) to “always” consider ESG when investing than the oldest group (55+). ). ). Attitudes towards ‘E’, ‘S’ or ‘G’ also vary by age, with the youngest cohort being more likely than the oldest to prioritize governance (42% vs. 30%). When it comes to the environment, 57% of the over 55s prioritize it versus 46% of 18-34 year olds.
DR Daniel KlierCEO at ESG Booksaid: “Increasingly, private investors are seeking more transparency about the sustainability impact of their investments, driven by growing awareness of it Positive ESG performance can improve returns. Our new partnership with eToro will give more investors access to high-quality ESG scores for better decision-making and help align capital towards more sustainable outcomes.”
The ESG scores calculated by ESG Book combine the latest market news, NGO signals and information reported by companies. Using the latest technology and research, the ratings are rebalanced daily to reflect changes in a company’s sustainability performance, with each rating update being instantly available on the eToro platform.
Notes for editors:
More information on ESG scores can be found here here.
(1) Business Involvement Flags include: Adult Entertainment, Alcohol, Controversial Weapons, Defense, Firearms, Fossil Fuels, Gambling, Nuclear Power, Pork, Stem Cells, Thermal Coal, Tobacco, GMOs, and Recreational Drugs.
(2) eToro’s Q2 Retail Investor Beat: Survey research conducted by Appinio from 7 to June 17, 2022. A total of 10,000 private investors in 14 countries were surveyed, 1,000 each: Great Britain, USA, Germany, France, Australia and Spain. 500 below: Italy, Netherlands, Denmark, Norway, Sweden, Poland, Romaniaand the Czech Republic. Retail investors were defined as self-directed or advisory and required to hold at least one investment product including stocks, bonds, funds, investment ISAs or equivalent. They didn’t have to be eToro users.
eToro is a social investment network that empowers people to expand their knowledge and wealth as part of a global community of successful investors. eToro was founded in 2007 with a vision to open up the global markets so everyone can trade and invest in a simple and transparent way. Today eToro is a global community of more than 30 million registered users sharing their investment strategies; and everyone can follow the approaches of the most successful. Due to the simplicity of the platform, users can easily buy, hold and sell assets, monitor their portfolio in real time and transact whenever they want.
About ESG book
ESG book is a global leader in sustainability data and technology. Founded in 2018, ESG Book combines cutting-edge technology and proprietary research to deliver ESG insights into over 25,000 companies worldwide. Its wide range of cloud-based sustainability products and solutions are used by many of the world’s leading financial organizations. The company serves customers worldwide from offices in Europe, North Americaand Asia.
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