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Global Sustainable Investement Alliance

What is Sustainable Investing? Sustainable investing is an investment approach making reference to environmental, social and governance (ESG) factors in the selection and management of investments. For the purpose of this global report and for articulating our shared work in the broadest way, GSIA uses an inclusive definition of sustainable investing, without drawing distinctions between this and related terms such as responsible investing and socially responsible investing. The sustainable investment strategies covered by this report are: 1. Screening of investments a. Negative/exclusionary screening - The exclusion from a fund or portfolio of certain sectors, companies or practices based on specific ESG criteria; b. Positive/best-in-class screening - Investment in sectors, companies or projects selected for positive ESG performance relative to industry peers; c. Norms-based screening – Screening of investments against minimum standards of business practice based on international norms. 2. Integration of ESG factors - The systematic and explicit inclusion by investment managers of environmental, social and governance factors into traditional financial analysis. 3. Sustainability themed investing – Investment in themes or assets specifically related to sustainability (for example clean energy, green technology or sustainable agriculture). 4. Impact/community investing - Targeted investments, typically made in private markets, aimed at solving social or environmental problems. Impact investing includes community investing, where capital is specifically directed to traditionally underserved individuals or communities, or financing that is provided to businesses with a clear social or environmental purpose. 5. Corporate engagement and shareholder action - This strategy employs shareholder power to influence corporate behavior including through direct corporate engagement (i.e. communicating with senior management and/or boards of companies), filing or co-filing shareholder proposals, and proxy voting that is guided by comprehensive ESG guidelines. The sum of these individual strategies, after adjusting for double counting since some assets are subjected to more than one strategy, results in the sustainable assets under management included in this report. In the report the aggregated figure is referred to as sustainable investment or investment taking into account ESG concerns, without making a judgment about the quality or depth of the process applied. The definition of each sustainable investment strategy is also available in the glossary. Global Sustainable Investment Review 2012 4


Global Sustainable Investement Alliance
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