What is responsible investment?
Responsible investment (RI) is an umbrella term used to describe a broad range of approaches for incorporating ESG (Environmental, Social, and Governance) considerations into the investment process. These approaches are not mutually exclusive; multiple approaches can be applied simultaneously within the investment process. For instance, a solution applying exclusionary criteria to the investment universe can also apply ESG integration to remaining assets eligible for investment.
ESG integration
Ongoing incorporation of material ESG factors into investment decision making with an aim to identify potential risks and opportunities and improve risk-adjusted, long-term returns.
ESG screening and exclusion
Applying positive or negative screens to include or exclude assets from the investment universe.
Thematic ESG investing
Investing in assets involved in a particular ESG-related theme or seeking to address a specific ESG issue.
Impact investing
Investing in assets with the intent to generate a measurable positive social or environmental impact.
Environmental
- Air and water pollution
- Biodiversity
- Climate change
- Ecosystem integrity
- Natural resource management and use
- Waste management
- Water quality and availability
Social
- Community relations
- Data privacy and security
- Employee engagement
- Gender and diversity
- Health and safety
- Human rights
- Indigenous rights
- Labour practices
Governance
- Board structure and independence
- Bribery and corruption
- Executive compensation
- Lobbying and political contributions
- Shareholder rights
- Tax strategy and accounting standards