Integration
Explicitly and systematically including ESG issues in investment analysis and decisions, to better manage risks and improve returns.
Screening
Applying filters to potential investments to rule companies in or out, based on an investor’s preferences, values or ethics.
Thematic
Trying to combine and balance decent financial returns and investment risks with a contribution to a specific environmental or social outcome. Includes impact investing.
Engagement
Investors can encourage the companies they are investing in to develop more sustainable business practices, for example.
Discussing ESG issues with companies to improve their handling, including disclosure, of such issues. Can be done individually, or in collaboration with other investors.
Engagement can also include “proxy voting” − formally expressing approval or disapproval of a company you have invested in, by, for example, proposing shareholder resolutions on ESG matters.