Relative to the appropriate broad market indices, we estimate ESG portfolio screening alone would rule out approximately 35-40% of Large Cap companies and 10%-20% of Small and SMID Cap companies.
Since ESG integration applies to all clients, whereas portfolio screening is a service for a subset of clients (a client-driven mandate), observed differences between Boston Trust Walden portfolios and screened portfolios with consistent investment objectives can be attributed to portfolio screening.
In Mid and Large Cap equity strategies, approximately 10%-15% of companies in Boston Trust Walden portfolios are determined to be unsuitable for typical screened portfolios.
In Small/SMID Cap strategies differences are smaller with less than 5% of companies determined to be inappropriate for typical screened portfolios.
The percentage reduction reported (10%) represents the approximate incremental impact of screening relative to ESG integration, which is implemented in all Boston Trust Walden portfolios.