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Banking 101 -
Glossary of Common ESG and Socially Responsible Investment Terms
As sustainable investing continues to gain popularity, it is important to understand the terminology involved. Here are some common ESG and socially responsible investment terms to know:
- Carbon Neutral: An investment approach that seeks to balance carbon emissions by investing in projects that reduce or offset emissions.
- Community Investment: Investing in projects or businesses that benefit the local community.
- Corporate Social Responsibility (CSR): A company's commitment to operating ethically and sustainably.
- ESG Divestment: Selling off investments in companies or industries that do not align with an investor's values or ESG criteria.
- Environmental Impact Assessment (EIA): An evaluation of the potential environmental impacts of a proposed project or investment.
- Environmental, Social, and Governance (ESG): Factors that are considered when evaluating the sustainability and ethical impact of an investment, including environmental impact, social responsibility, and corporate governance.
- Ethical Investment: An investment approach that aligns with an investor's values and beliefs. Often involves screening out certain companies or industries.
- Fossil Fuel-Free: An investment approach that excludes companies involved in fossil fuel production or consumption.
- Gender Lens Investing: An investment approach that seeks to promote gender equality and invest in companies with diverse leadership and policies.
- Green Bonds: Fixed-income securities that finance projects with environmental benefits, such as renewable energy or energy efficiency.
- Impact Investing: Investing in companies or projects with an objective to deliver positive social or environmental impact.
- Microfinance: Investing in companies or funds that provide financial services to underserved communities.
- Renewable Energy: Energy sources that are naturally replenishing, such as solar, wind, or hydro power.
- Social Impact Assessment (SIA): An evaluation of the potential social impacts of a proposed project or investment.
- Socially Responsible Investing (SRI): Considers the social impact of a company’s products, services, and operations during the investment process.
- Sustainable Investment: An investment approach that prioritises ESG factors in decision making.
- Sustainability Report: A report that outlines a company's ESG performance and commitments.
- Triple Bottom Line (TBL): A framework that evaluates a company's performance based on its impact on people, planet, and profit.
At Arbuthnot Latham, we are committed to helping our clients navigate the complex world of sustainable investing. We manage a range of investment strategies, including ESG strategies. Our investment experts can help you find a strategy that best aligns with your goals and financial values.
Contact us today to learn more
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DISCLAIMER
This communication should be considered a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research. It is for information purposes only and does not constitute advice, a solicitation, recommendation or an offer to buy or sell any security or other investment or banking product or service. You should seek professional advice before making any investment decision. The value of investments, and the income from them can fall as well as rise, and may be affected by exchange rate fluctuations. Investors could get back less than they invest. Past performance is not a reliable indicator of future results. The tax treatment of investments depends upon individual circumstances and may be subject to change.
The contents of this communication are based on opinions or conditions as at the date of writing and may change without notice. To the extent permitted by law or regulation, no warranty of accuracy or completeness of this information is given and no liability is accepted for its use or reliance on it.