Positive screening

Positive screening is an investment strategy where asset managers actively select companies or assets based on their strong environmental, social, and governance (ESG) performance relative to their peers. This approach identifies businesses with exemplary practices in sustainability, ethical governance, and social responsibility, making them candidates for inclusion in sustainable investment portfolios. Unlike negative screening, which excludes companies with poor ESG practices, positive screening focuses on rewarding top performers, typically the top 20%-50% in a given sector. This method is often used to build portfolios aligned with ethical values and to drive positive impact through responsible corporate behavior, particularly in thematic or impact investing strategies.