Tag: ESG
-
Climate Transition Benchmarks
Climate Transition Benchmarks A climate benchmark is defined as an investment benchmark that incorporates specific objectives related to greenhouse gas (GHG) emission reductions and the transition to a low-carbon economy — based on the scientific evidence of the IPCC — through the selection and weighting of underlying constituents. These benchmarks are intended to serve as…
-
Best in class
Best in class The best-in-class approach for sustainable investing involves identifying companies that excel in their respective sector in terms of meeting environmental, social, and governance (ESG) criteria. This strategy adopts a positive company screening selection method, favoring those with the highest ESG ratings or the most robust ESG commitments; without excluding or banning companies…
-
Exclusion
Exclusion Exclusion refers to the action of prohibiting a company’s securities from being included in a portfolio due to unethical, harmful, or illegal business activities. ESG criteria are utilized to assess a company’s compliance with desired standards, and if found lacking, it may be excluded from investment consideration, thus restricting its access to capital. The…
-
Financial Materiality
Financial Materiality Financial materiality is the aspect of Double Materiality that refers to the impact that ESG issues can have on a company’s financial performance. For example, how climate change, workforce management, or a company’s governance practices can influence its revenues, costs, asset value, and reputation. This is the traditional perspective of materiality in which…
-
ESG (Environmental, Social, Governance)
ESG (Environmental, Social, Governance) ESG stands for environmental, social and governance. These are called pillars in ESG frameworks and are used to evaluate the sustainability and ethical impact of an investment in a company. They are the main topic areas that companies are expected to report in. Here’s a summarized breakdown of each:
-
Corporate Sustainability Reporting Directive (CSRD)
Corporate Sustainability Reporting Directive (CSRD) Presented by the European Commission in 2021, the Corporate Sustainability Reporting Directive (CSRD) is a regulation designed to introduce standardized non-financial reporting across the EU. i.e. the way in which companies report on how they take into account environmental, social and governance issues. It succeeds the NFRD (Non-Financial Reporting Directive),…