In its evaluation, Morningstar examined how well sustainable funds are limiting their portfolios' exposure to environmental, social and governance (ESG) risk compared with peers, using the Morningstar Sustainability Rating. Morningstar found an increasing broadening of the portfolio characteristics of sustainable funds and the approaches they take to sustainable investing. For instance, climate-focused strategies range from seeking to reduce or remove exposure to carbon risk to investing in companies that are developing solutions to climate change.