Global investment funds applying environmental, social and governance (ESG) standards to their portfolios are excluding some of the world's largest and most well-known brands.
According to a recently released study from Copley Fund Research, both McDonald's Corp. and Wal-Mart Stores Inc. are widely held stocks, but have zero allocation from ESG fund managers. Copley Fund Research surveyed 767 global funds managing a total $1.2 trillion of assets.
“While ESG funds are less exposed to sectors with obvious social and sustainability challenges—notably tobacco and oil and gas—the food and staples sector is also vulnerable to being shunned by the growing mass of environmental and socially minded investors,” said Steven Holden, CEO of Copley Fund Research. That means these companies are missing out on a growing investor base—the combined AUM of ESG funds in Copley's database has doubled since 2017, from some $8 billion to over $16 billion.
Nor has shunning these firms neccessarily been a drag on performance; ESG funds returned an extra 3.2% in the last 5 years, according to Copley's research.
Here are the 20 most widely held global stocks, all with zero ESG fund ownership and compared to the percentage of all global equity funds that hold the stock, and the stock's average weight in those funds.