A worked example with Vanguard ESG U.S. Stock ETF shows how to check a fund against your own priorities.
By Jenna Lofton
A sustainable fund’s documents can tell you what its rules exclude, what it owns and what it costs. They can’t, by themselves, show that buying it will produce the environmental change you want. To see what you can learn, let’s work through Vanguard ESG U.S. Stock ETF, ticker ESGV.
I chose ESGV for its clear paper trail: an index methodology, a prospectus, dated holdings and stewardship disclosures. It’s a U.S. equity-fund example, not a recommendation. Another fund may take a very different approach.
This US-fund example uses holdings dated September 30, 2026, and documents reviewed by the author on October 26, 2026. Figures and rules can change. Dollar amounts are in US dollars.
Download the fund comparison worksheet (Excel) and start with the completed ESGV example. Then use the Quick comparison tab to check up to two funds against your own priority. Seven questions and a built-in fee calculator keep the task manageable. The extra detail is optional; use it when a particular claim needs a closer look.
Step 1 Write down what you want the fund to do
Perhaps you want to avoid fossil-fuel producers, invest in companies working on an energy transition, or choose a manager that challenges boards through shareholder votes. Those are different jobs. Write your priority in one sentence before the documents make the decision for you.
The SEC’s investor bulletin on ESG funds explains that funds can emphasize different environmental, social and governance factors. Unsustainable’s discussion of ESG labels and real economic change explores why disclosure and outcomes deserve separate attention.
Compare your priority with the fund’s stated objective. ESGV’s summary prospectus and 2026 supplements describe a screened U.S. stock index spanning large, medium and small companies, with larger companies carrying more weight. It offers exposure to an existing stock portfolio; it isn’t a dedicated fund for new climate projects.
Step 2 Read the exclusions and their thresholds
ESGV tracks the FTSE US All Cap Choice Index. Its exclusions cover certain fossil-fuel businesses, weapons, tobacco and nuclear power, alongside conduct and diversity criteria. FTSE’s August 2026 ground rules spell out what those categories mean.
The rules exclude companies earning 5% or more of revenue from oil-and-gas exploration, production, refining, processing, transportation or storage. Specified industry classifications provide a separate exclusion route. Covered nuclear-power activities have a greater-than-zero revenue threshold. Copy the activity, threshold and denominator for one rule that matters to you.
Then check the limits. Falling below one threshold doesn’t guarantee eligibility, because other screens can apply. Look for missing-data provisions too. The full prospectus says a holding can remain until a scheduled review or rebalance after it stops meeting the criteria. It also says derivatives are not ESG-screened; the fund can use them for portfolio exposure, but not for speculation or to magnify returns.
The nuclear exclusion is a useful values check. If you want nuclear power included in a low-carbon strategy, this rule may conflict with your goal. You’ve found something more useful than a reassuring label: a specific reason the approach might not suit you.
Step 3 See what the fund actually owns
Vanguard’s September 30, 2026 factsheet lists 1,209 stocks. Yet its ten largest holdings account for 44.3% of total net assets, and technology represents 50.6% under the factsheet’s classifications. A long holdings list can still be concentrated.
Nvidia, Apple and Microsoft were the three largest holdings, at 8.9%, 8.1% and 6.4%. Their rounded weights total about 23.4%. In a hypothetical US$10,000 holding, approximately US$2,340 would therefore be exposed to those three stocks at that snapshot.
Check whether those companies add something new or repeat investments you already own. StockHitter’s guide explains how to calculate sector exposure across funds, using comparable dates, denominators and classifications. Different fund names can hide familiar holdings.
Record the snapshot date beside the numbers. These are September holdings, and a company’s inclusion doesn’t certify everything it does.
Step 4 Put the fee in dollars
ESGV’s prospectus lists total annual fund operating expenses of 0.09%. At an unchanged balance and expense rate, US$10,000 × 0.0009 is US$9 a year. Enter an amount and each fund’s disclosed rate in the worksheet’s calculator to compare this one cost.
Actual balances change. ETF trading can also involve bid–ask spreads, brokerage charges and prices above or below net asset value, so the expense-ratio calculation won’t capture every possible cost. It doesn’t forecast returns either.
Step 5 Check climate figures when they matter to your goal
If a climate metric is part of your reason for choosing a fund, open the methodological notes. Vanguard says the factsheet’s metrics are informational and, unless the prospectus says otherwise, are not part of the investment objective or principal strategy.
Vanguard’s emissions methodology says its U.S.-domiciled ESG index funds do not pursue net-zero goals. The reported carbon-footprint and intensity measures use Scope 1 emissions from direct operations and Scope 2 emissions from purchased energy. They omit Scope 3, which covers other indirect emissions across the value chain. The measures are backward-looking, and changes in financial denominators can move them without an equivalent change in companies’ emissions.
Use the worksheet’s optional detail to record units, scope, coverage and date. Some underlying data may be estimated. Unsustainable’s guide to making sustainability claims verifiable helps explain why these boundaries matter: a portfolio metric alone doesn’t establish additional real-world emissions reductions.
Step 6 Look for evidence of actual votes
If shareholder influence is your priority, follow a second document trail. Vanguard lists ESGV among funds served by Vanguard Portfolio Management Investment Stewardship. That team’s January 2026 U.S. proxy policy considers environmental and social proposals case by case, focusing on issues it considers financially material to investors.
Start with Vanguard’s fund voting records and select the exact fund, reporting period, company and proposal. Check which policy governed the relevant shares, then read the company’s proxy statement and voting outcome. A policy explains the approach; the voting record shows what happened on a particular proposal.
A specific ESGV vote has not been independently verified for this example. The worksheet leaves that question open, with a next step to check it. A manager-wide voting statistic wouldn’t settle the fund-specific question.
Finish with the question you still need answered
The ESGV example gives you a screening rule, a dated view of concentration and an expense calculation. It also exposes a possible nuclear-policy mismatch and an unresolved voting question. Vanguard cautions that eligible companies may not match an investor’s values and may have negative or no impact. The fund can lose money.
For your own comparison, finish with what fits your priority, what conflicts with it and the next thing to verify. You can stop there if you have enough information to identify a mismatch; you don’t owe every fund a research dissertation.
Keep the worksheet as a record to revisit when the rules, holdings or your priorities change. Its value is in the questions it helps you answer, not in producing a green score.
Jenna Lofton is the founder of StockHitter.com, where she writes about investing and evaluating financial claims.
Disclosure: Jenna states that neither she nor StockHitter has a commercial or affiliate relationship with Vanguard or ESGV. This unpaid editorial contribution is an educational worked example, not personal investment advice or a recommendation to buy the fund.
Featured photo: Jakub Żerdzicki / Unsplash.