Are ESG Funds Actually Ethical?
We tested the claim. We audited the top ESG ETFs company by company — against court filings, investigative reports, and NGO data. Not corporate self-reports. Here's what we found.
We audited 12 ESG funds. Here's what we found.
Why Most ESG Funds Fail the Ethics Test
Same agencies, same blind spots
ESG funds are rated by the same agencies that missed every major corporate scandal. They reward disclosure, not behaviour.
Revenue thresholds, not ethics
Most ESG screens use revenue thresholds rather than absolute exclusions. A company can earn from fossil fuels, weapons, or tobacco and still qualify.
Self-reported data
Most ESG ratings rely on what companies say about themselves. Sustainability reports are written by PR teams, not auditors.
How Mashinii Audits ESG Funds
1
Discover the top holdings
We identify each fund's largest positions from public filings and provider disclosures — the companies your money actually backs.
2
Score each holding independently
Every company is scored across 11 ethical dimensions using court records, regulatory actions, investigative reports, and NGO data. No self-reported ESG disclosures.
3
Aggregate into a fund rating
Holdings scores are weighted by position size to produce an overall fund ethics rating — from Excellent to Poor. No curve grading, no relative benchmarks.
Frequently Asked Questions
Are all ESG funds the same?
No. Our audits show wide variation in how ESG funds screen their holdings. Some exclude entire industries, others use revenue thresholds that allow companies with significant exposure to pass. Two funds labelled 'ESG' can hold very different companies — and score very differently in our ethics audit.
Can ESG funds hold controversial companies?
Yes. Most ESG screens rely on corporate self-reporting or are slow to respond to new information. A company can face active lawsuits, regulatory actions, or investigative exposures and still pass ESG screens until the next review cycle. Our audit checks what companies actually do, not what they disclose.
How does Mashinii rate ESG funds?
We identify the top holdings of each fund from public filings, then score every holding across 11 ethical dimensions — including human rights, environmental damage, corruption, and labour practices. Scores are weighted by position size and aggregated into an overall fund ethics rating.
What data sources does Mashinii use?
Court filings, regulatory enforcement actions, investigative journalism, and NGO reports. Our sources are adversarial — they capture what companies are caught doing, not what they claim to be doing.
Is this financial advice?
No. Mashinii provides ethics-focused analysis for informational purposes only. Our ratings reflect ethical concerns identified through public records and should not be used as the sole basis for investment decisions. See our Risk Disclosure for full details.
Know what your money actually funds
Upload your holdings and get scored across all 11 ethical dimensions.
Fund audits are based on AI-generated analysis of publicly available data. Not financial advice. See our Risk Disclosure for full details.