The Heart Rating of Socially Responsible Funds

Since 1992, the Heart Rating has been the leading tool investors use to get a snapshot of socially responsible investment funds environmental, social, and governance performance.

The Heart Rating launched in 1992 as the first fund rating system that compares the breadth and depth of the environmental, social and governance criteria (ESG) used by fund managers to select the holdings. The Rating looks at a fund’s research process, screening criteria, shareholder advocacy efforts with companies, and cash investments in communities, particularly communities of color. As a snapshot, the Rating distinguishes funds that take a comprehensive approach to ESG from those that address only a few issues.

Overall ScoreShareholder Advocacy ScoreCommunity Investing ScoreESG Screening ScoreFund NameOverall Heart RatingESG ScreeningShareholder AdvocacyCommunity Investing
15410121231919 Socially Responsive Balance4422
193
2210149AB Sustainable Global Thematic4442
102103051
Access Capital Community Investment3205
11820095Alger Responsible Investing3340
157203095Amana Developing World*4325
157203095Amana Growth*4325
157203095Amana Income*4325
157203095Amana Participation*4325
973282American Beacon 24 Sustainable ShortTerm Bond3321
19209American Trust Allegiance*1110
2372130174Appleseed Fund5545
5020018Ariel Appreciation 2140
5020018Ariel Discovery2140
5020018Ariel Focus 2140
5020018Ariel Fund 2140
330021Ave Maria Bond*1100
330021Ave Maria Catholic Values*1100
330021Ave Maria Growth*1100
330021Ave Maria Opportunity*1100
330021Ave Maria Rising Dividend*1100
330021Ave Maria World Equity*1100
210220178AXS Green Alpha ETF5540
261056Azzad Ethical Fund*2142
261056Azzad Wise Capital Funds*2142
54.51536Baywood Socially Responsible Equity4450
6626028BNY Mellon Active Mid Cap Fund2250
6626028BNY Mellon Alternative Diversifier Fund2250
6626028BNY Mellon Appreciation Fund2250
6626028BNY Mellon Balanced Opportunity Fund2220
6626028BNY Mellon Diversified Emerging Markets Fund2250
6626028BNY Mellon Diversified International Fund2250
6626028BNY Mellon Emerging Markets Fund2250
6626028BNY Mellon Equity Income Fund2250
6626028BNY Mellon Global Emerging Markets2250
6626028BNY Mellon Global Equity Income2250
6626028BNY Mellon Growth and Income2250
6626028BNY Mellon International Equity Income2250
6626028BNY Mellon Large Cap Equity2250
6626028BNY Mellon Large Cap Growth2250
6626028BNY Mellon Mid Cap Growth2250
6626028BNY Mellon Small Cap Equity2250
6626028BNY Mellon Strategic Value 2250
10226064BNY Mellon US Sustainable Equity2250
1912812139Boston Common ESG Impact International4452
1912812139Boston Common ESG Impact US Equity4452
12517099Brown Advisory Large Cap Sustainable Growth3340
140173092Brown Advisory Sustainable Bond4345
173160145Calamos Global Sustainable Equities4430
178
30
12124Calvert Growth Allocation 4452
196
30
30124Calvert Balanced Portfolio4455
196
30
30124Calvert Bond Portfolio4455
196
30
30124Calvert Midcap 4455
17830
12124Calvert Conservative Allocation 4452
17830
12124Calvert Developed Markets Ex-US Responsive Index4452
196
30
30124Calvert Emerging Markets Equity4455
196
30
30124Calvert Equity Portfolio4455
196
30
30124Calvert Global Energy Solutions4455
196
30
30124Calvert Global Water4455
17830
12124Calvert Green Bond 4452
17830
12124Calvert High-Yield Bond 4452
17830
12124Calvert Income 4452
196
30
30124Calvert International Equity 4455
196
30
30124Calvert International Opportunities 4455
17830
12124Calvert Large-Cap Core Portfolio4452
17830
12124Calvert Core Bond 4452
17830
12124Calvert Moderate Allocation 4452
17830
12124Calvert Short-Duration Income 4452
196
30
30124Calvert Small-Cap 4455
17830
12124Calvert Tax-Free Responsible Impact Bond 4452
17830
12124Calvert U.S. Large-Cap Core Responsible Index4452
17830
12124Calvert U.S. Large-Cap Growth Responsible Index4452
17830
12124Calvert U.S. Large-Cap Value Responsible Index 4452
17830
12124Calvert U.S. Mid-Cap Core Responsible Index4452
67.530
12124Calvert Ultra-Short Income4452
67.530
12124Calvert Flexible Bond 4452
1561230
102
CCM Alternative Income3325
2122410166AXS Change Finance ETF5542
13716084ClearBridge All Cap Growth ESG ETF4430
126160101ClearBridge Dividend ESG ETF3330
133160105ClearBridge Large Cap Growth ESG ETF3430
1561230102CCM Community Impact Bond3325
12224878Miller Howard High Yield Strategy 3342
20.55012.5DFA US Social Core Equity2 Portfolio2220
20.55012.5DFA US Sustainability Core1 Portfolio2220
6815
048Domini International Social Equity5550
83151548Domini Social Bond 5555
6815048Domini Social Equity 5550
5050DWS GNMA1102
134192083Ecofin Sustainable and Social Impact Term3344
10628066 Engine No. 1 Transform 500 ETF 3250
1751426124Eventide Gilead*4435
11628080Gabelli ESG Fund3350
2313030159Green Century Balanced5555
229
300187Green Century Equity5550
22930
0187Green Century MSCI International Index5550
141160115Hennessy Stance ESG Large Cap Core3430
7711058Humankind US Stock ETF2220
152610127Impact Shares Affordable Housing MBS ETF4432
10009Integrity Growth & Income Fund1100
790067Invesco MSCI Green Building ETF2200
12001098Invesco Solar ETF3302
152300110John Hancock ESG All Cap3350
152300110John Hancock ESG Large Cap 3350
7412046KBI Global Investors Aquarius Fund4440
16507LKCM Aquinas Growth Fund*2120
16507LKCM Aquinas Small Cap Fund*2120
160507LKCM Aquinas Value Fund*2120
3712023Loomis Sayles Inflation Protected Securities 2240
124120101Matthews Asia Emerging Markets Sustainable Future Fund 3430
1561014120Mirova Global Green Bond5453
7412046Mirova Global Sustainable Equity4440
379323Natixis Sustainable Future Funds2231
1821710143
Neuberger Berman Sustainable Equity4432
6913547New Alternatives Fund5552
155303086New Covenant Balanced Growth*3355
155303086New Covenant Balanced Income*3355
155303086New Covenant Growth*3355
155303086New Covenant Income*3355
3613153Northern Global Sustainability Index3155
149300110Nuveen ESG Emerging Markets ETF3350
154300115Nuveen ESG International Developed Markets ETF3450
155300116Nuveen ESG Large Cap ETF3450
155300116Nuveen ESG Large Cap Value ETF3450
155300116Nuveen ESG Mid Cap ETF3450
155300116Nuveen ESG Mid Cap Value ETF3450
155300116Nuveen ESG Small Cap ETF3450
183
1818135Parnassus Asia Fund4433
1831818135Parnassus Core Equity4433
2031818155Parnassus Endeavor4533
1831818135Parnassus Fixed Income4433
2031818155Parnassus Fund4533
1831818135Parnassus Mid-Cap4433
1831818135Parnassus Small Cap4433
1932930122
Impax Core Bond4455
19329
30122Impax Ellevate Global Women’s Index4355
1932930122Impax US Sustainable Economy4355
2242930153Impax Global Opportunities5555
224
2930153Impax Large Cap5555
1932930122Impax World Balanced4355
224
2930153
Impax World Global Environmental Markets5555
1932930122Impax World High Yield Bond4355
19329
30122Impax International Sustainable Economy4355
1932930122Impax World Small Cap4355
5050Pimco Low Duration1102
1943010142Trillium ESG Global Equity4452
1983030126Praxis Growth Index*4455
1983030126Praxis Impact Bond*4455
1983030126Praxis International Index*4455
1983030126Praxis Small Cap*4455
1983030126Praxis Value Index*5455
169830119RBC Impact Bond5445
157203095Saturna Sustainable Bond4325
157203095Saturna Sustainable Equity4325
10530063Schroder’s International Alpha3250
8212062Sphere 500 Fossil Free2220
11015087Thornburg Better World International3330
155812123TIAA-CREF Social Choice Bond5442
153300114TIAA-CREF Social Choice Equity3350
156300117TIAA-CREF Social Choice International3450
1551030128TIAA-CREF Green Bond5455
152250118TIAA-CREF Social Choice Low Carbon3450
330024Timothy Aggressive Growth*1100
330024Timothy Conservative Growth*1100
330024Timothy Defensive Strategies*1100
330024Timothy Fixed Income*1100
330024Timothy High Yield Bond*1100
330024Timothy International*1100
330024Timothy Israel Common Values*1100
330024Timothy Large/Mid Cap Growth*1100
330024Timothy Large/Mid Cap Value*1100
330024Timothy Small Cap Growth*1100
330024Timothy Strategic Growth*1100
122
24878Touchstone Premium Yield Equity3342
3003USAA First Start Growth Fund1100
250020Vanguard FTSE Social Index2200
140162884Variant Impact3335
10821076VanEck Environmental Sustainability3340
10916084VegTech Plant-based Innovation & Climate ETF3230
204220173Vert Global Sustainable Real Estate4440
2223030150Boston Trust Walden Balanced5550
192300150Boston Trust Walden Equity4550
192300150Boston Trust Walden Mid-Cap4550
134180106JP Morgan US Sustainable Leaders3330
192300150Boston Trust Walden Small-Cap4550
11613091Aberdeen Global Equity Impact Strategy3330
11117084Ecofin Global Renewables Infrastructure3330
12493072Columbia Threadneedle US Social4355
167120143Essex Global Environmental Opportunities4420
866068Segall Bryant & Hamill Workplace Equality Fund2210
159170130Ecofin Global Water ETF4430
11721086Glenmede Women in Leadership Equity3340
11921088Glenmede Responsible ESG Equity3340
204210171AGF Global Sustainable Growth Equity4540
10118073Putnam Sustainable Leaders Equity2230
10118073Putnam Sustainable Future Equity2230
2232010182ClearBridge Sustainability Leaders5543
210220178Shelton Green Alpha5540
232236191Adasina Social Justice All Cap Global ETF5541
7151243Nuveen ESG US Aggregate Bond ETF2232
10910088Nuveen ESG High Yield Corp Bond ETF3350
808655VanEck Global Green Bond2221
7313049VanEck Low Carbon Energy ETF
2230
446028BlackRock Advantage ESG Intl Equity1
1
1
0
4701225BlackRock Sustainable Advantage Core Alpha Bond1
1
02
376021BlackRock
Sustainable Advantage Emg Mkts Equity
1
1
1
0
5011029BlackRock Sustainable Advantage Lrg Cap Core1
1
20
30
0126iShares Agency Bond ETF1
1
02
21
029iShares ESG Aware 1-5 YR USD Corp Bond ETF1
1
01
40
6024iShares ESG MSCI EAFE ETF1
1
1
0
59
6041iShares Global Clean Energy ETF2
2
1
0
30
0126iShares MBS ETF 1
1
02
62
6046iShares MSCI Global Impact 2
2
1
0
600050FundX Sustainable Impact
2
2
00
988080Guinness Atkinson Alternative Energy2
3
1
0
11116085Hartford Climate Opportunities3
3
2
0
570243Vanguard ESG Corporate Bond ETF2
2
01
6620034Vanguard ESG International Stock ETF2
1
4
0
7920047Vanguard ESG US Stock ETF2
2
4
0
1281030180TIAA-CREF Green Bond5455
709051iShares KLD 400 Social Index ETF2
2
2
0
141170113Janus Int’l Sustainable Eq ETF 43
50
134120110Etho Climate Leadership US ETF3
3
2
0
10316076Janus Net Zero Transitional Resources ETF3
2
40
186210155US Vegan Climate ETF4540
13319
0103Janus US Sustainable Eq ETF3340
333030Riverbridge Eco Leaders1
1
00
11116085Hartford Global Impact3
3
2
0
1501412113Eventide Exponential Technologies*3
3
3
2
1521420107Eventide Dividend Opportunities*3
3
3
4
2062714153Nia Impact Capital453
5
213290172Boston Common ESG Impact Emerging Market5505
14126
0106Impact Shares Sustainable Development Goals Global Equity3
3
50
136250102Impact Shares NAACP Minority Empowerment ETF3
3
50
138250104Impact Shares YWCA Womens Empowerment ETF3
3
50
157140132Eventide Healthcare & Life Sciences*433
0

* Fund uses particular faith-based or religious screens that are not part of Natural Investments’ Heart Rating criteria.

© Natural Investments, LLC. Please contact Natural Investments, LLC for permission to publish or reproduce any part of this material. We would be happy to discuss this with you and your organization.

Disclosures and Disclaimer

 

The Heart Rating methodology is based on manager responses to our detailed questionnaire and our analysis of fund-disclosed information in the prospectus, which identify specific avoidance and affirmative screening criteria, shareholder advocacy strategies, community investments, and the management firm’s research process. Each practice used by a fund to select holdings is weighted and scored using objective, standardized criteria and translates to a ranking that delineates the number of points, and therefore hearts, awarded. Hearts are awarded as follows:

  • 81-100% quintile – 5 hearts
  • 61-80% quintile – 4 hearts
  • 41-60% quintile – 3 hearts
  • 21-40% quintile – 2 hearts
  • 0-20% quintile – 1 heart

Funds can only receive 4 or 5 hearts if they participate in shareholder advocacy and/or community investing. Funds may change their approach and so are re-rated periodically. We do not rate each holding in the funds, merely the methodology by which the manager constructs the portfolio. Financial performance is not a part of the Heart Rating.
The chart below lists funds in order of overall Rating, and also includes ratings of each of the underlying three categories of criteria so you can see where funds are strongest. Feel free to sort the columns to find the leaders and laggards in each area. Details on the scoring criteria are provided below the chart.

The Heart Rating includes over 40 ESG criteria, categorized by theme:

  • “Vices” (alcohol, firearms, gambling and tobacco
  • Environment, including fossil fuel and green economy sectors
  • Employment practices, including wage and workplace standards, diversity and equity, and benefits
  • Corporate governance, including Board diversity and independence, responsiveness to shareholders, and
  • Product quality and safety
  • Military contracting
  • Nuclear power
  • Unnecessary animal testing
  • Health issues
  • Community relations, including towards BIPOC communities
  • International human rights

Some fund managers have absolute criteria that automatically trigger exclusion of a holding, others make determinations on a case-by-case basis, and some use a best-in-class approach to select the best company in a given sector rather than omit the entire sector. Fund managers may also proactively seek outstanding leaders in certain ESG areas or sectors, while many managers include companies that are benign – neither offensive or outstanding.
The Heart Rating weights absolute screening more heavily than a case-by-case or best-in-class approach. Affirmative screening practices that identify leaders in responsible and sustainable practices are also weighted more heavily. ESG screening represents nearly 60% of the total score.

The use of shareholder dialogue and action with company management is a direct and powerful tool for bringing about changes in corporate behavior and policy. Each fund is evaluated for participating in dialogue with companies, drafting and supporting shareholder resolutions, and engaging in public policy efforts. Funds with dedicated advocacy staff and that take leadership roles in managing industry-wide investor advocacy campaigns are rated highly. Advocacy comprises 18% of the total score.

Funds are evaluated on the impact of their cash positions. Allocations to community development financial institutions, municipal bonds in low-income and BIPOC communities, and targeted investments such as microcredit institutions in emerging markets are given high marks, while agency securities and corporate bonds score lower. Community investing comprises 18% of the total score.

Funds are evaluated on the tools and people used to make decisions about what investments to hold. Firms with dedicated personnel and proprietary issuer research are rated more highly than those using company self-reported information or external social research services or ESG indices. Research comprises 4% of the total score.

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