Sustainable Investing, Socially Responsible Investing (SRI), Environmental, Social, Governance (ESG)
Sustainable investing, socially responsible investing (SRI), environmental, social, governance (ESG) investing, impact investing, thematic investing, socially conscious investing, green investing, … There are many investment approaches and philosophies in this area and the terminology can be confusing.
Sustainable investing is generally considered the umbrella term used to include most of these related investment approaches.
SRI and ESG Investment Approaches
Socially responsible investing (SRI) and environmental, social, governance (ESG) investing are two of the more common terms and investment approaches within sustainable investing.
SRI adopts a form of exclusionary screening that sets minimum standards for a company’s business practices based on a specific set of criteria. Companies are either excluded or included in a particular investment fund.
ESG investing implements a framework or set of criteria used to evaluate a company’s environmental, social and governance risks and practices.
SRI and ESG Areas of Focus
Areas of focus in SRI & ESG investing can include:
- carbon emissions
- efficient energy
- waste management
- pollution mitigation
- labor standards
- health
- safety
- product liability
- personal privacy
- board structure
- executive compensation
- corporate corruption
Align Your Investments With Your Values
Sustainable Investing has been growing over the past decade and there are increasing numbers of investment vehicles available to institutional investors and to the public. The investment approaches and selection criteria of these investment vehicles vary widely.
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