The investment world has just welcomed a new era in transparency. Upright, a science-based impact analysis company, is launching a groundbreaking open database covering the societal and environmental impacts of over 35,000 mutual funds and ETFs. It is a unique tool that opens the access of retail and professional investors to data that quantifies the real-world effects of their investments. With the promise of sustainable investing under the spotlight, the Upright database makes sure that a revolution in how we truly assess the impact of funds on our planet and society is at hand.
Unraveling the Complexity in Sustainable Investing
The premise of sustainable investing is rather simple yet powerful: to channel capital into those companies that are giving back positively to the world. As sustainable investing has grown bigger, it has also grown increasingly complex. While regulatory frameworks such as the Sustainable Finance Disclosure Regulation have, for example, created categories like Article 8 and Article 9 to bring in more transparency and accountability, the proliferation of all these labels, awards, and ratings obscures clarity that investors need for informed decisions. That is where Upright’s new database comes in, offering a much-needed solution. Rather than relying on labels and accolades that sometimes mislead or oversimplify a fund’s impact, the database presents hard data on what the companies within those funds are actually doing. Upright applies its proprietary impact quantification model to grade funds across four major categories: environment, health, society, and knowledge.
As Kristina Luoma, one of the founders of Upright, puts it: “We don’t focus on what awards each fund has won and what labels they qualify for. We double down on what the companies in the funds actually do as their core business and how that impacts the world around them.” This switch from rating-based tools to science-based analysis provides investors with a much clearer picture of the real effects their investments have.
Surprise Findings: Labels are often not as forthcoming as they may appear.
Most enlightening of all, perhaps, from Upright’s database: Some of the highest-rated sustainable funds are not performing as well as their labels might indicate. Article 9 funds, thought of as some sort of a gold standard in sustainability because of their high environmental and social standards, do not always live up to expectations. Upright’s analysis shows that 17% of Article 9 funds perform worse in terms of societal and environmental impact than the average Article 8 fund.
This underlines the most important problem in the area of sustainable investments: whoever relies on labels and ratings gets only a partially correct or even misleading picture. Article 9 funds are devised to have the highest sustainability focus, yet their actual impact is truly low if one goes by Upright’s data-driven approach. This is particularly very worrying for investors who really try to make a difference with their money, a need for deeper insight.
Empowering Investors with Facts-Based Insights
The launch of this database is, therefore, important for both professional and retail investors. For the first time, detailed, comparable data of the impact of over **35,000 mutual funds and ETFs** lets investors in on a journey of informed decision-making about where they should place their money. Beyond superficial labeling, they can reach an understanding of the real impact from their investments-a level that gets down to the heart of the business practices of the companies held within the funds.
Upright’s platform allows investors to compare different sectors and specific funds by offering a breakdown of both positive and negative impacts of funds. This allows investors to see not just the potential return of their investments but also the societal and environmental consequences of those financial decisions.
For retail investors, this level of access is of most value. This level of depth in impact data has historically been available only to institutional investors using expensive and sophisticated ESG tools. Now, with the open-access Upright platform, individual investors can examine how their portfolios are contributing to pressing global challenges, such as climate change and social inequality.
Upright’s database gives professional investors the competitive advantage. For the first time, portfolio managers, ESG analysts, and institutional investors have the ability to look into the funds they manage and recommend with a level of granularity never possible before. These professionals can avoid greenwashing and ensure alignment between their clients’ sustainability goals and their investment choices.
Real Impact, Beyond Labels
As the sustainable investment landscape continues to shift, the demand for transparency and accountability has never been felt stronger. The database from Upright speaks directly to that by shifting the focus from awards and ratings to consequences in the real world because of investment decisions.
But with the growing demand for responsible investing, there is increasingly greater pressure on companies and funds to demonstrate their positive contribution to society and the environment. Investors without proper tools may be misled by superficial ratings that do not reflect the real impact of a fund. Upright gives investors data-driven insight into looking through the label and making choices fact-based on science, not marketing.
By shedding light on these typically blind spots of mutual funds and ETFs, Upright is creating a whole new sense of transparency in the arena of sustainable finance. Now, investors can analyze their investments based not just on financial return but on the impact it has with the world at large. This may finally ensure that capital flows begin to meaningfully shift to those companies and sectors that are genuinely making a difference.
The Future of Investing
The launch of the Upright database is a significant step in this movement in the right direction for more responsible investing. With challenges in the world growing in scale, such as climate change, social inequality, and public health crises, investors are increasingly looking for ways to align their portfolios with their values.
With deep impact data at their fingertips, they’re now much more likely to do just that. By cutting through the noise of labels and awards, Upright’s tool enables investors to focus on what matters most: real-world consequences. This level of transparency is a whole new chapter in sustainable finance, where impact, rather than intention, takes center stage in investment decisions.