Methodology

AskSustainable (AS) has established a definition of what it means to be a Climate-Friendly Investment: An investment where proceeds are used to fund activities and technologies that reduce harmful impacts to the climate or increase climate resiliency.

Currently, only products that are domiciled in the US and available to US investors are profiled, across three separate product categories: Depository Products, Impact Funds, and Pooled Funds (currently, ETFs are the only Pooled Funds featured on AS).

In general, there is a three-step process to identify whether a product is truly Climate-Friendly.

1. We review the full universe of investment product providers and identify product providers with commitments to climate-consciousness, climate or environmental impact, or sustainability. We then subsequently review each of the products offered at these providers to determine accessibility to the US market, and to confirm the presence of commitments to climate-consciousness, climate or environmental impact, or sustainability.
2. If a product is accessible to the US market and “green” commitments are present, we then evaluate the scope and depth of the commitment to climate action. This step in the process attempts to track the flow of dollars from investment placement to potential climate action.
3. Lastly, after procuring a general idea of how the product's Use of Proceeds align with its “green” commitments, we then confirm whether the projected flow of capital meets AS’s Climate-Friendly definition stated above.

To ensure complete and accurate information, when compiling a product profile, AS may directly engage with the product provider. Also, AS may consider individual product referrals submitted for review.

Please see below, for more in-depth knowledge on how products were selected within each product category.

AS initiated its search for Climate-Friendly Depository Products by reviewing approximately 230 unique financial institutions. The following criteria was used to determine this population of financial institutions: Green America Listings, Member of the Opportunity Finance Network, Member of the Global Alliance for Banking on Values, B-Corp Certification or pending B-Corp Certification, sustainability-oriented Community Development Financial Institution, and Signatory of the UN Principles for Responsible Banking.

These 230 financial institutions captured in the initial search, were then reviewed to determine retail investor access for US residents. 120 institutions were in scope for US retail investors. Each depository product offered at these institutions, was then analyzed in order to determine the presence of any "green" commitments.

The following key words were used as reference points, which indicated the marketing of “green” commitments: Green, Sustainable, Clean Energy, Environmentally-Friendly, Climate-Friendly, Solar, and Wind. The presence of these key words on provider websites or marketing materials, indicated the possibility of identifying a Climate-Friendly product.

Once the presence of a “green” commitment was confirmed, the commitment was studied to check for alignment with AS’s definition of a Climate-Friendly Investment.

As of November 2022, the AS database profiles 95 distinct Depository Products, across 21 unique institutions.

AS initiated its search for Climate-Friendly Impact Funds by reviewing approximately 600 unique Impact Funds. The following criteria was used to determine this population of Impact Funds: Green America Listings, Member of the Opportunity Finance Network, B-Corp Certification or pending B-Corp Certification, sustainability-oriented Community Development Loan Fund, and Signatory of the UN Principles for Responsible Investment.

These 600 Impact Funds captured in the initial search, were then each reviewed to determine if they had an active product available to US investors. 100 Impact Funds were in scope for US investors. Each investment product offered at these Impact Funds, was then analyzed in order to determine the presence of any "green" commitments.

The following key words were used as reference points, which indicated the marketing of “green” commitments: Green, Sustainable, Clean Energy, Environmentally-Friendly, Climate-Friendly, Solar, and Wind. The presence of these key words on provider websites or marketing materials, indicated the possibility of identifying a Climate-Friendly product.

Once the presence of a “green” commitment was confirmed, the commitment was studied to check for alignment with AS’s definition of a Climate-Friendly Investment.

As of November 2022, the AS database profiles 33 distinct Impact Fund products, across 27 unique institutions.

AS initiated its search for Climate-Friendly ETFs by reviewing approximately 160 unique funds. This population of ETFs was identified by the tagging of "ESG", either within the fund name or on fund marketing materials. These ETFs might have also met the following criteria: B-Corp Certification or pending B-Corp Certification, CDP member, Signatory of the Task Force on Climate-Related Financial Disclosures, and Signatory of the UN Principles for Responsible Investment.

These 160 ETFs captured in the initial search, were then reviewed to determine how the “Environmental” pillar of ESG played a role in fund management.

The following key words were used as reference points to indicate the presence of environmental factors within the fund’s investment scope: Green, Sustainable, Clean Energy, Environmentally-Friendly, Climate-Friendly, Solar, Wind, and Best-in-Class. The presence of these key words on product websites or marketing materials, indicated the possibility of identifying a Climate-Friendly product.

ETF product profiles can be segmented into two sections: Pure Play and Best-in-Class. Pure Play and Best-in-Class funds have clear pathways to understanding potential climate action stemming from investment placement.

Funds that either liquidated or withdrew the application of ESG within their investment objectives, were removed from the AS platform. In addition, funds that indicated the incorporation of ESG factors within their investment objectives, but did not specify exact environmental issues considered, were also removed from the AS platform.

As of November 2022, the AS database profiles 104 distinct ETFs, across 43 unique institutions.