Online broker eToro is currently rolling out a new feature to provide ESG scores for thousands of stocks. This way, its clients can have clear and convenient access to this valuable information.

The broker explains that the rollout will happen in stages, so if you don’t see the ESG scores on your app just yet, don’t worry.

Unfortunately, there is no universally accepted ESG scoring system to guide investors, and ESG measurements can be quite subjective depending on who is calculating them. To ensure that eToro’s scores are as reliable as possible and reflect the most accurate information, eToro has partnered with ESG Book.

ESG Book is a global leader in ESG data analytics, used by top financial institutions to measure the sustainability performance of the world’s largest corporations. The company combines cutting-edge technology and research to make this data more widely accessible to the public.

ESG Book takes companies’ self-reported information (published annually) into account as well as news and NGO signals on a continuous basis. This allows for the scores to be rebalanced daily and reflects any changes in the sustainability performance of a company, and thus, any change in score can be seen immediately on the eToro platform.

eToro’s ESG scoring system features a user-friendly “traffic light” colour scheme:

• A green score shows that the company is a leader in its sector in terms of ESG.
• An amber score shows that the company is average in its sector in terms of ESG.
• A red score shows that the company has a poor rating in terms of ESG, relative to its sector.

ESG is becoming increasingly popular. Studies have shown that companies which are more ESG-friendly tend to deliver more robust financial results over time. Therefore, investors are looking to ESG as a way of avoiding risks and as a potential source of better long-term returns.