Goldman Sachs has partnered with Paul Tudor Jones’ foundation to launch a new exchange-traded fund by the name of JUST on Wednesday, June 13th. Unlike other funds, Goldman Sachs’ new fund targets firms that engage in “just business behavior.” The fund will be comprised of selections from Russell 1000 companies and will track the top 50 percent of those in each industry based on JUST Capital’s model. This model scores businesses using a formula related to workers, customers, products, environment, jobs, community and management, and was compiled after JUST Capital surveyed over 72,000 Americans to gain an understanding of business practice issues—related to environmental, social and governance issues—that matter most to them.
While the fund lacks a proven track record, it is important to note that the fund would have outperformed the Russell 1000 by 3.47% over the last two years. In addition, the companies in the fund outperformed the remaining companies in the Russell 1000 in many socially conscious areas. These companies paid 71% less in fines for consumer sales-terms violations, 94% less in Equal Employment Opportunity Commission fines and produced 45% lower GHG emissions per dollar of revenue, while also creating American jobs at a 20% greater rate.
The Fund boasts a unique methodology, giving it the ability to evolve from year to year as investor concerns shift over time. Most other ESG methodologies remain static over time, measuring the same statistics year after year.