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Global Sustainable Investement Alliance

The biggest strategy in terms of assets, negative screening, approximately mirrors the overall balance of regional sustainable investment assets shown in Figure 1. However, the types of screens vary even if the process is the same. For example, the most common negative screens in the United States are for investments in controversial regimes such as Sudan and Iran. In Europe and Canada, in contrast, the most common negative screens are for financing of controversial weapons such as cluster munitions and anti-personnel mines. In Asia, negative screening in many cases is for Shariah-compliant investments, especially in fixed income. Positive screening or best-in-class approaches are significantly more prevalent in the United States compared to the other regions. Positive screening globally is measured at just over US$ 1 trillion, and the United States accounts for at least 60 percent of this figure. ESG Integration is proportionally more utilized as an investment strategy in Europe and Canada than in the US, if one compares the proportions to the total numbers in Figure 1. It is also by far the most common strategy in Africa. Norms-based screening is, as previously mentioned, only found in European and African asset managers. This is a strategy that originated in the Northern part of Europe, and has now spread to much of the rest of the continent. Subsequent global studies will no doubt reveal whether this proliferation can extend beyond Europe’s borders in any significant volume. The figures for sustainability themed assets and impact investing, as discussed, may be influenced by methodology. They are also very small in comparison to the other numbers, so small differences in the absolute figures can have a large impact on the proportions. However, in general terms, it is fair to state that sustainability themed assets are most common in Europe, while impact investing is concentrated in the US. The last strategy, corporate engagement and shareholder action, is discussed later in the report. The point to make here is not that the data from the various regions are incomparable, but that cultural and historical diversity fosters different solutions to the same challenges. In many cases, the choice of investment vehicle is also driven by the legal framework or tax consideration of each country or region. This rich diversity of approaches within investments that incorporate ESG considerations represents an opportunity for industry players to learn from each other by sharing experiences. See also the section on shareholder stewardship for insight into the differing approaches used globally to address the principal-agent issue inherent in company ownership. Global Sustainable Investment Review 2012 14


Global Sustainable Investement Alliance
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