Canadian Sustainable ETFs have lower degrees of ESG Risk than Traditional Funds

Here, we compare the Morningstar Sustainability Rating for a universe of Canadian-domiciled Sustainable ETFs against the broader universe of all Canadian-domiciled ETFs. On average, the degree of ESG Risk (materially financial risks stemming from environmental, social, and governance related topics) tilts lower for sustainable ETFs and hence these funds seem to receive higher Sustainability Ratings from Morningstar (informally known as the 'globe' ratings).