The screen
As the debate around the merits of ESG investing rages on, investors are reminded that the heart of most ESG scores centre around financially material risk. In other words: How much can a company stand to lose from issues that arise from climate change, social impacts and, classically, poor corporate governance practices?
Regardless of where you stand on ESG, as a prudent investor it is worthwhile considering risks that are not spelt out in traditional financial statements. To help with this task, today I use Morningstar CPMS to create a strategy that looks for profitable Canadian companies that have gained the favour of Street analysts and exhibit a low degree of ESG risk.
Hope its Suncor and Canadian Natural Resources, they are making bank big! Invest with your brains out there kids.