Despite concerns, ESG strategies may become a crowded trade for impact investors – so Vanguard is taking a different track

cnbc.com:

It's a fund looking to make money from green investing.

The inclusive, actively managed Vanguard Baillie Gifford Global Positive Impact Stock Fund (VBPIX) is an environmental, social and governance product that bundles companies with positive, inclusive and sustainable intentions. 

«It's really a fund that's going to be investing in global equities looking to deliver long-term outperformers by doing so in investing in companies that are contributing positively to really advancing and solving some of the world's most challenging problems, whether those be environmental or social or otherwise,» Matt Piro, Vanguard's global head of ESG product, told CNBC's "ETF Edge" on Monday.

While the ETF denotes socially responsible investing, that particular theme is sparking questions. The Securities and Exchange Commission has expressed concerns about the current unestablished state of ESG fund disclosure requirements across the entire industry. The agency has proposed two rule changes for the sector.

«It is important that investors have consistent and comparable disclosures about asset managers' ESG strategies so they can understand what data underlies funds' claims and choose the right investments for them,» SEC Chair Gary Gensler said in a May statement.

Companies held in Vanguard's positive impact stock fund include ASML, Taiwan Semiconductor, Moderna, John Deere and Tesla, which the S&P 500 removed from its ESG index in May. Tesla's S&P DJI ESG score dropped as a result of «codes of business conduct» and deficient low carbon strategy, as well as «claims of racial discrimination and poor working conditions at Tesla's Fremont factory,» according to the Indexology blog.

Piro contends Vanguard's design principles look at investment