In its most simplified form, ESG can be seen as negative screening, which means not investing in so-called sin stocks, the shares of companies involved in the production of weapons, alcohol, tobacco, gaming, and fossil fuels such as coal, gas or oil
It can also take the form of norms-based screening, the exclusion of companies that violate some set of norms, such as the 10 Principles of the UN Global Compact.
Investors may alternatively adopt a “best-in-class” or positive screening approach by selecting companies with an especially strong ESG performance compared with their industry peers.
Or finally, they might apply an ESG integration strategy in which all ESG risks and opportunities are included in the investment analysis and decision-making process.…
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I by IMD (Digital) - 1 Issue, 09. March 2023