ESG World ETF Comparison 2026
An ESG or SRI world ETF lets you invest broadly while screening out controversial sectors. But “ESG” spans a wide spectrum: from light (ESG-Screened/Enhanced, close to the normal index) to strict (SRI, far fewer holdings and a higher tracking difference). We explain the tiers, compare the most important products with ISIN and TER, and say honestly where greenwashing lurks.
ESG-Screened, ESG-Enhanced or SRI? Three levels of strictness
Behind the umbrella term “sustainable world ETF” sit very different filters. They all start from the classic MSCI World (roughly 1,400 developed-market stocks), but then exclude very different amounts. The stricter the screen, the fewer holdings remain — and the more the return can diverge from the standard index.
- ESG-Screened / Enhanced: only the worst sectors (coal, tobacco, controversial weapons) and the ESG laggards are excluded; the rest stays close to the index. Often over 1,000 holdings remain.
- SRI (Socially Responsible Investing): much stricter — only the ESG leaders per sector are kept (“best-in-class”), plus hard exclusions. Often only 300–400 holdings remain.
- The fewer the holdings, the higher the tracking difference to the standard MSCI World — sometimes better, sometimes worse. More concentration means more divergence.
The most important ESG/SRI world ETFs compared
The table below ranks the products by strictness — from the top (mild, many holdings, close to the index) down (strict, few holdings, larger divergence). All physically replicate an MSCI World variant; all ISINs and TER figures were verified in June 2026.
ESG/SRI world ETFs (as of June 2026)
| Product | ISIN | TER p.a. | Filter type |
|---|---|---|---|
| iShares MSCI World ESG Enhanced CTB | IE00BHZPJ569 | 0.20 % | ESG-Enhanced · ~1,116 holdings |
| Xtrackers MSCI World ESG | IE00BZ02LR44 | 0.20 % | ESG-Screened · ~632 holdings |
| iShares MSCI World SRI | IE00BYX2JD69 | 0.20 % | SRI (strict) · ~350 holdings |
| UBS MSCI World SRI | IE00BK72HJ67 | 0.19 % | SRI (strict) |
| Amundi MSCI World SRI Climate PAB | IE000Y77LGG9 | 0.18 % | SRI + Paris-aligned |
Tracking difference: what strictness really costs
The decisive figure is not the TER but the tracking difference to the standard MSCI World. An ESG-Enhanced ETF like the iShares (IE00BHZPJ569) holds over 1,000 stocks and runs almost in lockstep with the standard index — the ESG screen barely costs return. A strict SRI ETF, by contrast, is a genuine active bet: with only around 350 holdings and a high tech weighting, it can beat or trail the MSCI World over years — depending on whether the excluded sectors (oil, defence) happen to be running.
- ESG-Enhanced/Screened: minimal divergence, essentially a “greener MSCI World” — ideal if you want index tracking without big bets.
- Strict SRI: large divergence possible, higher concentration in tech/healthcare, less energy and industrials — a deliberate departure from the market.
- Before buying, compare the 5-year tracking difference (e.g. on trackingdifferences.com), not just the headline TER.
Be honest with yourself: there is no single definition of “ESG”. Each index provider sets its own criteria, and an ESG-Screened ETF may still hold oil majors or big tech with questionable practices. “ESG” is not a seal of quality and it is not charity — you are still investing for return, not for a clear conscience alone. Check the actual top holdings and exclusion criteria in the factsheet before trusting a green-sounding name. Stricter SRI is more credible than mild ESG screening, but it costs diversification.
🌍 Tax: an ordinary equity ETF
For tax purposes, ESG/SRI world ETFs get no special treatment — they are equity ETFs like any other MSCI World ETF. As an example of how this plays out (German rules; rules vary by country — check your local rules):
- 30 % partial exemption (Teilfreistellung) in Germany because the equity ratio exceeds 50 % — only 70 % of gains/distributions are taxable.
- On the taxable portion, 25 % flat capital gains tax plus the solidarity surcharge (and possibly church tax).
- For accumulating ESG/SRI ETFs the German advance lump-sum (Vorabpauschale) applies; the annual €1,000 saver’s allowance (€2,000 jointly) shields part of the income. In other countries the brackets, exemptions and reporting differ — always check your local rules.
FAQ — ESG and SRI world ETFs 2026
What is the difference between an ESG and an SRI world ETF?
ESG-Screened and ESG-Enhanced ETFs filter out only the worst sectors and ESG laggards and stay close to the normal MSCI World, often keeping over 1,000 holdings. SRI ETFs (Socially Responsible Investing) are much stricter: they keep only the ESG leaders per sector (best-in-class), so often only 300–400 holdings remain and the divergence from the standard index becomes larger.
Does an ESG world ETF deliver less return than a normal MSCI World?
Not necessarily. A mild ESG-Enhanced ETF runs almost in lockstep with the MSCI World, with minimal tracking difference. A strict SRI ETF with only around 350 holdings diverges more and can beat or trail the index, depending on whether the excluded sectors such as oil and defence happen to be performing. It is a deliberate bet, not a guaranteed out- or under-performance.
Which ESG/SRI world ETF is the cheapest in 2026?
The Amundi MSCI World SRI Climate Paris Aligned UCITS ETF (IE000Y77LGG9) is the cheapest in our comparison at a 0.18 % TER, followed by the UBS MSCI World SRI (IE00BK72HJ67) at 0.19 %. iShares (SRI IE00BYX2JD69, Enhanced IE00BHZPJ569) and Xtrackers ESG (IE00BZ02LR44) sit at 0.20 %. More important than the TER, though, is the tracking difference to the standard index.
Is ESG investing greenwashing?
Partly a fair concern: “ESG” is not standardised, every provider defines its own criteria, and mildly filtered ESG-Screened ETFs can still hold oil majors and controversial companies. It is not a seal of quality. Investors with a genuine standard should reach for stricter SRI products and check the actual top holdings and exclusion criteria in the factsheet — while accepting that it remains a return-seeking investment, not a donation.