US Vegan Climate ETF has a number of positive attributes that a sustainability-focused investor may find appealing.
This strategy holds securities with low exposure to ESG risk relative to those of its peers in the Morningstar US Equity Large Cap Growth category, earning it the highest Morningstar Sustainability Rating of 5 globes. ESG risk provides investors with a signal that reflects to what degree their investments are exposed to risks related to material ESG issues, such as climate change and inequalities, that are not sufficiently managed. ESG risk differs from impact, which is about seeking positive environmental and social outcomes.
US Vegan Climate ETF has a sustainability or ESG-focused mandate. Funds with an ESG-focused mandate are more likely to align with the expectations of an investor who cares about sustainability issues. One key area of strength for US Vegan Climate ETF is its low Morningstar Portfolio Carbon Risk Score of 4.37 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. The fund is therefore well positioned to transition to a low-carbon economy.
Us Vegan Climate Etf shows 16.86% involvement in carbon solutions. This percentage surpasses the 11.23% average involvement of its peers in the Large Growth category. Carbon solutions include products and services related to renewable energy, energy efficiency, green buildings, green transportation, and so on.
The fund has relatively high exposure (9.44%) to companies with high or severe controversies. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that may negatively affect stakeholders, the environment, or the company’s operations.
By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with controversial weapons, tobacco, thermal coal, and small arms. The fund mostly fulfills this goal; however, it does exhibit 0.21% exposure to companies involved in small arms. This compares with 0.68% for its average peer in the US Equity Large Cap Growth category.