Inside "Ethical" ETFs: What the Holdings Data Actually Shows
Billions of dollars flow into ESG ETFs every year. Funds like the iShares ESG Aware MSCI USA ETF (ESGU), the Vanguard ESG U.S. Stock ETF (ESGV), and similar products promise investors exposure to companies that meet environmental, social, and governance standards. The pitch is straightforward: invest here, and your money goes to companies doing the right thing.
But what happens when you score the actual holdings?
We took the 26 companies that appear most frequently across popular ESG ETFs -- names like Apple, Microsoft, JPMorgan, Amazon, and ExxonMobil -- and scored each one across 11 independent ethical dimensions using court filings, regulatory actions, investigative journalism, and NGO reports. No corporate self-assessments. No ESG questionnaires. Just independently sourced, cited evidence.
The results raise serious questions about what "ethical" screening actually filters out.
The Headline Numbers
| Metric | Result |
|---|---|
| Companies scored | 26 |
| Average score across all 26 | -4.5 |
| Companies with a negative average score | 17 of 26 (65%) |
| Companies with 5 or more negative dimensions | 15 of 26 (58%) |
| Companies with zero negative dimensions | 1 of 26 (4%) |
Nearly two-thirds of the most common ESG ETF holdings score negatively in our analysis. More than half carry negative scores across five or more of the eleven dimensions we measure. Only one company -- Visa -- has no negative dimension scores at all.
The average score of -4.5 is not catastrophic, but it is negative. For funds marketed as ethical, that is worth examining.
The Full Scorecard
Here is every company, ranked by average score from lowest to highest.
| Company | Ticker | Average Score | Negative Dimensions (of 11) |
|---|---|---|---|
| Exxon Mobil | XOM | -25.0 | 10 |
| Procter & Gamble | PG | -19.1 | 8 |
| JPMorgan Chase | JPM | -18.6 | 8 |
| Coca-Cola | KO | -18.2 | 8 |
| McDonald's | MCD | -18.2 | 9 |
| PepsiCo | PEP | -15.0 | 8 |
| Meta Platforms | META | -14.5 | 8 |
| Johnson & Johnson | JNJ | -14.1 | 8 |
| Home Depot | HD | -11.4 | 6 |
| Nike | NKE | -11.4 | 6 |
| AbbVie | ABBV | -10.5 | 6 |
| Amazon | AMZN | -10.0 | 6 |
| NVIDIA | NVDA | -9.1 | 5 |
| Linde | LIN | -7.7 | 6 |
| UnitedHealth Group | UNH | -4.1 | 4 |
| Merck | MRK | -0.5 | 4 |
| Texas Instruments | TXN | -0.5 | 4 |
| Alphabet/Google | GOOGL | +2.3 | 5 |
| Microsoft | MSFT | +5.5 | 4 |
| Mastercard | MA | +8.2 | 2 |
| Accenture | ACN | +8.6 | 2 |
| Apple | AAPL | +9.5 | 3 |
| Salesforce | CRM | +11.8 | 2 |
| Adobe | ADBE | +12.3 | 2 |
| Visa | V | +15.9 | 0 |
| Cisco Systems | CSCO | +16.4 | 3 |
Five Findings That Stand Out
1. ExxonMobil Is a Top Holding in ESG Funds -- and Scores -25.0
ExxonMobil appears in several major ESG ETFs. In our analysis, it scores negatively on 10 of 11 dimensions. Its only non-negative score is on Kind to Animals, where it scored 0.
| Worst Dimensions | Score |
|---|---|
| Better Health for All | -40 |
| Fair Pay & Worker Respect | -40 |
| Honest & Fair Business | -40 |
| Planet-Friendly Business | -30 |
| Safe & Smart Tech | -30 |
| Zero Waste & Sustainable Products | -30 |
The presence of the world's largest publicly traded oil company in "ethical" portfolios is, on its own, a question worth asking. That it scores -25.0 across our independently sourced methodology makes that question more pointed.
View ExxonMobil's full score breakdown
2. JPMorgan Chase Scores -80 on Governance -- the Lowest Single Score in the Set
JPMorgan Chase, the largest bank in the United States and a fixture in ESG ETFs, scored -80 on Honest & Fair Business. That is the lowest single-dimension score of any company in this analysis.
A score of -80 reflects a substantial volume of independently documented regulatory penalties, legal proceedings, and governance concerns in public records. JPMorgan's overall average of -18.6, with 8 of 11 dimensions negative, places it among the lowest-scoring companies here.
| Dimension | Score |
|---|---|
| Better Health for All | +10 |
| Safe & Smart Tech | +10 |
| Zero Waste & Sustainable Products | 0 |
| Kind to Animals | -10 |
| No War, No Weapons | -10 |
| Fair Money & Economic Opportunity | -20 |
| Fair Trade & Ethical Sourcing | -20 |
| Respect for Cultures & Communities | -25 |
| Fair Pay & Worker Respect | -30 |
| Planet-Friendly Business | -30 |
| Honest & Fair Business | -80 |
View JPMorgan Chase's full score breakdown
3. Procter & Gamble Scores -50 on No War, No Weapons
Procter & Gamble, the consumer staples giant behind brands like Tide, Pampers, and Gillette, scored -50 on No War, No Weapons. This is the second-lowest single-dimension score in the set after JPMorgan's governance mark.
P&G's overall average of -19.1 with 8 negative dimensions puts it alongside the oil majors and banks at the bottom of this group. For a consumer products company, that may come as a surprise to investors who associate the brand with household goods rather than ethical controversy.
View Procter & Gamble's full score breakdown
4. McDonald's Scores Negatively on 9 of 11 Dimensions
McDonald's has the highest number of negative dimensions of any company in this analysis: 9 out of 11. Its scores range from -10 to -30 across nearly every metric we track, including Planet-Friendly Business (-30), Honest & Fair Business (-30), and Fair Pay & Worker Respect (-30).
Only two dimensions -- Fair Money & Economic Opportunity (0) and Respect for Cultures & Communities (0) -- are non-negative, and those are neutral rather than positive.
The breadth of negative scores matters. This is not a company with one problem area. According to the independent evidence in our data, concerns span labour, environment, governance, health, sourcing, and technology.
View McDonald's full score breakdown
5. Only 9 of 26 Companies Score Positive on Average
The companies that do score positively are concentrated in technology and financial services: Cisco (+16.4), Visa (+15.9), Adobe (+12.3), Salesforce (+11.8), Apple (+9.5), Accenture (+8.6), Mastercard (+8.2), Microsoft (+5.5), and Alphabet (+2.3).
But even among these, most carry notable negatives. Microsoft scores -60 on No War, No Weapons, reflecting documented defence contract relationships. Apple scores -30 on Fair Pay & Worker Respect, driven by supply chain labour findings. Alphabet scores -40 on Honest & Fair Business, based on regulatory actions and antitrust proceedings.
Having a positive average does not mean a clean record. It means the positives outweigh the negatives in aggregate. The dimension-level detail tells a different story.
Which Dimensions Are Weakest?
Across all 26 companies, some dimensions are consistently problematic.
| Dimension | Average Score | Companies Negative |
|---|---|---|
| Fair Pay & Worker Respect | -18.1 | 21 of 26 |
| Fair Trade & Ethical Sourcing | -17.3 | 19 of 26 |
| No War, No Weapons | -15.4 | 18 of 26 |
| Honest & Fair Business | -15.0 | 20 of 26 |
| Kind to Animals | -4.6 | 10 of 26 |
| Safe & Smart Tech | -3.8 | 11 of 26 |
| Planet-Friendly Business | -3.1 | 14 of 26 |
| Zero Waste & Sustainable Products | +3.1 | 10 of 26 |
| Fair Money & Economic Opportunity | +3.1 | 3 of 26 |
| Better Health for All | +7.3 | 7 of 26 |
| Respect for Cultures & Communities | +14.2 | 4 of 26 |
Worker rights, ethical sourcing, and corporate governance are the three dimensions where ESG ETF holdings perform worst in our analysis. Fair Pay & Worker Respect averages -18.1 across these 26 companies, with 21 of 26 scoring negatively. These are arguably the dimensions that matter most to investors buying "ethical" funds.
The strongest dimensions -- community relations (+14.2) and health (+7.3) -- tend to reflect corporate philanthropy, social programmes, and public health initiatives, which are more visible and more easily managed through PR.
What This Does Not Mean
This analysis is not an argument that ESG ETFs are worthless, or that their screening processes have no value. ESG providers use their own methodologies, weighting systems, and data sources, and they may be optimizing for objectives that differ from ours.
What this data does show is that companies passing ESG screens still carry substantial negative scores when assessed through independently sourced evidence -- court filings, regulatory actions, and investigative reporting rather than corporate disclosures.
A fund labelled "ethical" or "ESG" is not a guarantee that every holding meets a high ethical bar on every dimension. The data suggests many do not.
How We Score
Mashinii scores companies across 11 ethical dimensions using independently sourced data: court filings, regulatory actions, investigative journalism, and NGO reports. Scores range from -100 to +100. A score of 0 means insufficient independent evidence to assess in either direction. Every score is backed by cited sources that users can review.
We do not use corporate self-assessments, ESG questionnaires, or sustainability reports as inputs. Companies cannot influence their scores through disclosure or engagement.
Learn more about our methodology
What Should You Do?
If you hold an ESG ETF, you likely own several of the companies listed above. The question is not whether your fund has an ESG label. The question is whether the companies inside it align with your actual values.
You can find out in under 60 seconds.
Upload your ETF holdings to see how they score across all 11 dimensions.
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