Does sustainability matter to you?
Your investments can be an important lever for solving societal challenges such as climate change, extreme poverty, or species extinction. As an independent, non-profit platform, MyFairMoney helps you take sustainability into account and invest in line with your values. Our promise: nothing is sold here!
"Sustainable investment" is the term for financial investments that take into account environmental, social and/or corporate governance aspects. For instance, this can refer to investments in equity funds that demand transparent remuneration for board members, and/or exclude companies that violate human rights.
There is a range of ESG criteria and different asset classes (e.g. funds, bonds, direct investments) that take these criteria into account with various strategies. What they all have in common, however, is that they must have an investment strategy in writing in order to be formally defined as a sustainable investment.
Because sustainable investments can take so many different forms, it's important to look at specific funds to make sure that they align with your own goals and preferences. MyFairMoney is here to help you with this.
Discover your sustainability profile
Use our questionnaire to get an individualized sustainability investing profile, which you can use the next time you speak with your financial advisor. Usually, these meetings are focused only on financial matters, but your sustainability profile allows you to bring your non-financial goals into the discussion. It's mandatory for investment advisors to take into account your non-financial investment goals and sustainability preferences.Access the questionnaire
Before giving investment advice, advisors need to collect information about their client with a questionnaire. This covers, for instance, information about:
- their experience with and knowledge of financial products,
- their risk aversion,
- their ability to bear losses,
- and their investment objectives.
On this basis, a sustainable financial product can be matched to the investor's profile. In the past, this profile usually covered risk aversion and investment goals, i.e. what the investor is saving for. So-called non-financial objectives and preferences were left out.
Now, however, the EU Commission's "Action Plan for Financing Sustainable Growth" will impose new requirements. The assessment of investors' non-financial preferences, such as on topics like the environment, social issues or corporate governance, are expected to be mandatory for financial advisors from mid-2022.
For this reason, 2° Investing Initiative has researched ways to integrate the new requirements into investment advice together with stakeholders from the financial sector, politics, science and civil society. The analyses and results from these working groups were the basis for the creation and further development of the sustainability questionnaire and automated preference profile, which you can use here on MyFairMoney.
It's important for the sustainability questionnaire to capture the precise nature of an investor's non-financial goals, in order to help minimize the risk of mis-selling or misleading business practices. This can also help the investor clarify their sustainability preferences, prioritize different ESG topics (e.g. climate change, human rights, or compliance with international standards) as well as identify the appropriate investment strategy. The results are made available as a PDF.
Research by 2° Investing Initiative shows that investors' sustainability preferences fall into three main categories:
Investors focusing on ESG-related risks and opportunities ("Risk & Opportunities Focused Investors"): This category comes closest to a financial investment objective. Investors in this category aim to mitigate financial risks and take advantage of new opportunities to profit from an ESG investment.
Investors focus on avoiding or supporting value-related issues ("value focused investors") These investors want to avoid or promote certain sectors or activities to be in line with their moral, political or religious values.
Investors focused on having a direct and measurable impact in the real economy on ESG-related issues ("Impact Focused Investors"): These investors want their investment strategy to have a measurable impact on the real economy and want concrete evidence of this.
From mid-2022, financial advisors will be required to ask about financial as well as non-financial preferences and to offer appropriate financial products. The tools on MyFairMoney, such as the sustainability profile, can help retail investors express their social, ecological or ethical goals and preferences.
However, advisors should also consider these non-financial objectives and preferences if they were been specifically expressed. Recommending an investment that does not meet the client's objectives in this respect could lead to a liability for damages. Investors must in any case be informed immediately if investment advisors cannot offer a capital investment that meets the stated objectives.
The basis for these new regulations is a new European regulation (MiFID II) which was enacted as part of the EU Commission's action plan for financing sustainable growth.
How sustainable is your fund?
The fund database with around 9,000 European funds can perform several tasks for you. You can use 36 filter options, e.g. based on your individual sustainability profile, to identify funds that match all or some of your non-financial preferences. With the help of the search functionality, you can also find more detailed ESG information about individual funds. Note that the fund database is purely for informational purposes and does not constitute an investment advisor.Access the fund database
Our fund database includes 31 ESG data points for 9,000 funds, making it one of the largest non-commercial retail investor databases of its kind. The filters are predominantly based on 2° Investing Initiative methodologies as well as the sustainability rating agency ISS ESG. In addition to these filters, the sorting function can be used to display the funds in different orders, otherwise the funds with the highest Paris Alignment Scores are displayed first.
The methodology behind the Paris Alignment Score was developed by InfluenceMap with technical support from 2° Investing Initiative. Paris alignment in this case means that the production plans of the companies in a fund are on average already in line with the Paris Agreement goals to limit global warming to up to 1.75° C. Companies from climate critical sectors, including power, oil, gas and coal production, steel and cement producers, automobile manufacturing and airline, are analyzed. These economic sectors are particularly relevant for a climate analysis because together they account for 75% of global CO2 emissions.
Learn more about the technical background of the Paris Compatibility Score here.
If you're searching for a specific fund or if you want to examine a fund more closely, open up the fund profile to display in-depth ESG information. While the bar chart shows the exact positioning of a fund's Paris score compared to the fund universe, the historical chart shows the development of the Paris score over time. This makes it possible to check whether the most energy-intensive companies in the fund are in line with the Paris climate goals today and/or whether they will be in the future.
The Paris score refers to the announced production plans of the most energy-intensive companies for the next five years, such as their plans to expand renewable energy. A fund is rated "green" if the technological production plans from the most energy-intensive companiesin in a fund are, on average, in line with the Paris Agreement goals.
The section "Controversial corporate shares in the fund" shows the shares of companies in the fund that are involved in alleged controversial activities. Since funds are often invested in several hundreds of multinational companies from diverse industries, controversial activities are displayed for almost all funds. You will need to decide on your own how important these controversial activities are for your own investment, and whether compromises are possible. The data on controversial corporate activities are mainly taken from the sustainability rating agency ISS ESG as well as from the climate data provider Asset Resolution.
At the bottom of the fund profile, the "ESG Performance Score" shows an absolute ESG rating by ISS ESG. The ISS ESG score ranges from 0 to 100, with 100 representing "very good". The ISS ESG performance score represents an absolute ESG rating of the fund. For the calculation, the individual scores of companies in the areas of environmental, social and corporate governance are combined and aggregated at the fund level. As multinational companies are only just starting to move towards sustainability, the highest ESG score in the fund database is currently 66/100. The presentation of these ratings and labels does not constitute a guarantee by MyFairMoney for their quality or accuracy. The individual providers of ESG ratings and certificates use different methods, which means that ratings or label requirements can vary greatly among providers. This can mean that a fund is rated very well by one provider while it has a poor rating from another provider. Whether your own expectations of the labels are met can be checked in this comparison from Novethic. In the event that a link under "Transparency profile" in the fund detail view is displayed, you can use this to access the fund's sustainability profile. This will provide you with valuable information about the sustainable investment strategy of the fund management. However, the transparency profile is voluntary and is not verified by third parties.
Some of the sustainability criteria mentioned in the MyFairMoney questionnaire cannot currently be mapped in the fund database due to data availability issues. These include some exclusion criteria, impact targets and information on certain funds' sustainable investment strategies.
The indicators for the negative filters/controversial activities in the fund database were designed to be as strict as possible based on the ISS ESG data. We also included a 0% tolerance level for turnover in the respective controversial company activities. All activities analysed by ISS ESG are considered on MyFairMoney. Different stages of value creation are considered, this can include e.g. services for processing, production or distribution of products. For example, assuming that one company in a fund generates 1% of its sales from the distribution of alcoholic beverages and another company generates 1% of its sales from the production of oxygen masks for the Air Force, then the negative filters/controversial activities "Addictive substances (tobacco, alcohol)" and "Civilian firearms or military equipment" are activated in the database. Fund providers can define a different scope for the exclusion of controversial activities or obtain data on controversial activities from different ESG rating providers. Therefore, it may be worthwhile for private investors to have an open dialogue with fund providers in order to better understand the background of the specified exclusion criteria (e.g. tolerance for turnover thresholds or scope of the covered value chain) and to check whether the definition of the exclusion criteria meets their own expectations.
As the 2° Investing Initiative has shown in several analyses, there is insufficient evidence of the impact of financial products on the real economy. However, intermediaries of financial products are responsible for providing this proof of impact if they advertise their products with this promise. Neither the Paris Score, ISS ESG Performance Score, ISS ESG Prime Status nor Fund Rating on MyFairMoney can therefore be used to infer the sustainability impact of a fund.
No investment advice or investment brokerage is provided on this website. No information is requested about the user's risk tolerance, investment behaviour and personal and economic circumstances, nor is any evaluation of these criteria carried out in any form. Investment advice is therefore expressly not provided. The sole purpose of this website is to provide information on the question of the sustainability of various investment funds. The decision to conclude or terminate a contract lies with the retail investor. They should therefore enquire carefully about the costs, opportunities and risks of a product.
The operators of myfairmoney.eu have received the information on the listed investments from the issuer or from third parties. No check has been carried out to ensure that the information provided is correct and up to date. Therefore, no liability is assumed for the correctness, completeness and up-to-dateness of the information provided here. The information shown may be changed or supplemented at any time without prior notice. The operators are not obliged to update or revise the database in any way.
Get ready for your next financial consultation
There's no need to feel intimidated by a consultation with your bank or financial advisor. Under "Good Advice," you can use videos and quizzes to learn what's important during the meeting and what you can look out for to ensure that your sustainability goals are taken into account. A checklist helps you apply what you learned during the meeting or to evaluate your meeting afterwards.Access "Good Advice"
Good preparation will help you ask the right questions, watch out for pitfalls, and get the best results when meeting with your financial advisor. This will involve gathering information about your current financial situation, mapping your future financial goals, and considering your non-financial investing objectives. While it might seem like a lot of effort, it will help you build confidence in investing and better achieve your goals.
In order to evaluate the current state of retail advisory, 2° Investing Initiative carried out roughly 100 mystery shopping visits in France. As part of this, retail investing clients visited banks, met with advisors, and received advice and product recommendations. In some consultations, the mystery shoppers made their sustainability goals very clear.
Results: over and over, the consultations were incomplete, too general or failed to consider the clients' interests. Often, advisors failed to adequately complete client profiles or address their sustainability preferences, and sometimes they even recommended inappropriate products.
This is a warning signal for consumers. They should remember that an advisory meeting is also a sales meeting, at least from the bank's point of view. Sustainability is not (yet) a compulsory part of these services. This means that retail clients need to be aware of their rights and ask questions in case of doubt.
The "Good Advice" section provides information about financial advisory, answers frequently asked questions, and points out important pitfalls.
If you are dissatisfied with your advice, contact your bank - or, in the case of serious violations, the banking supervisory authority in your respective country.