A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
"Assets under Management"
Best-in-Class
Approach where the leading companies with regard to ESG criteria from each individual sector or industry group are identified and included in the portfolio. (Subset of positive screening).
Divestments
Companies that are sold from the fund portfolio.
Engagement
A long-term process of dialogue with companies by investors which seeks to positively influence company behaviour in relation to their social, ethical, governance and environmental practices. This includes vote at AGM, filing or co-filing shareholder proposals, asking questions at AGM, collaborative engagement initiatives, individual company contact and dialogue with policy makers and industry organisations.
ESG
Environment, Social and Governance.
Exclusion
The exclusion of sectors or companies from a fund if involved in certain activities based on specific ESG criteria.
Fund (s)
A legal entity, the purpose of which is solely the acquisition of portfolio investments. This also includes compartments and sub-funds.
Fund manager
The entity responsible for overall management of the fund.
Fund Purpose
The spirit and overall focus of the fund, but not the investment criteria employed..
High Net Worth Individuals (HNWI)
Individual with more than $1 million in liquid financial assets.
Holdings
Equities and/or bonds of companies that collectively comprise the fund portfolio.
Integration
The explicit inclusion by asset managers of ESG-risk into traditional financial analysis. Corporate Governance risk should be limited here to the interface between Governance and Social and Environmental issues.
Norms-based exclusions
Negative screening of companies according to their compliance with international standards and norms such as issued by OECD, ILO, UN, UNICEF, etc.
Portfolio
A collection of investments managed by the fund manager.
Positive screening
The selection, within a given investment universe, of stocks of companies that perform best against a defined set of ESG criteria. This may include Best-in-Class or SRI theme funds for instance.
Simple screening
An approach that excludes given sectors or companies from a fund if involved in certain activities based on specific criteria, such as arms manufacture, publication of pornography, tobacco, animal testing, etc.
SRI
A generic term covering sustainable, responsible, ethical, environmental, social investments and any other investment process that integrates financial analysis with the influence of environmental, social and governance (ESG) issues. It includes an explicit written policy to make use of ESG criteria.
SRI theme funds
Thematic funds may focus on sectors such as water or energy, or issues such as the transition to sustainable development and a low carbon economy. To be considered SRI, a theme fund must show an explicit SRI motivation, taking into account ESG considerations in the fund construction process. This requires the existence of specific mechanisms, such as the involvement of SRI expertise in stock analysis selection, the application of an ESG screen, or the management of the product by the SRI team. (Subset of positive screening).
Sustainable investment
Combining investors' financial objectives with their concerns about social, environmental and governance (ESG) issues. Examples include negative screening, positive screening, thematic investments, etc.
Values-based exclusions
This refers to exclusions where more than two negative criteria/filters are applied (as opposed to just tobacco or weapons for example).
Voting Policy
Policy of a fund to exercise its voting rights as investors to influence company behaviour.
