Responsible investing has become a focus area in the investment industry, but greenwashing is rife and the sales pitch is strong. To help fiduciaries explore responsible investing we’ve noted some of the commonly used terms within and around the industry:
| Responsible investment |
| An investor will recognise the link between the success of a company and its interaction with society and the environment. Key factors taken into account are collectively known as ESG factors (environmental, social, governance). |
| Socially responsible investing (SRI) |
| Commonly known in its abbreviated form, the definition is the same as “responsible investment” and “sustainable investing”. Any perceived differences in the definitions are likely due to the time in which they were first coined and the underlying investment approaches they first referred to. For example, “SRI” was initially understood to mean negative screening. |
| Sustainable investing |
| Commonly accepted definition is the same as “responsible investment” and “SRI”. |
| Ethical investing |
| An investor’s moral, religious and/or social values and beliefs guide what they invest in. |
| Green (light/dark/deep) investing |
| Commonly referred to in the context of ethical investing where the shade of green gives the investor an idea of how rigorous the ESG criteria for investment has been applied. |
| ESG |
| Environmental, social and governance issues are underlying factors an investor may consider when determining the future value of an investment. |
| PRI |
| Principles for Responsible Investment. UN-supported organisation that examines how investors can incorporate consideration of environmental, social and governance factors when investing. |
| SDGs |
| Sustainable Development Goals. A total of 17 goals designed as “a blueprint to achieve a better and more sustainable future for all by 2030”. |
The latest version of Beneath the Surface of Responsible Investing can be found here.
Any other jargon that isn’t easy to understand? Please contact us.
Research IP delivers high quality investment fund research and consultancy services to financial advisers, charities & NFPs and the broader financial services industry. Our experience spans well over 20 years working directly across the multiple facets of finance, so we understand the key drivers and challenges for managers, as well as the impact for investors and the broader industry.
We strive to give you the best information, so you can help your clients make better decisions, and feel more confident about doing business with you. We believe that not only can everybody win, everybody should.
Reach out to us today about your research and consulting needs, and how to make the data work for you, and your clients.
Would you like to see research on a Managed Fund? Then enquire here.
Photo credits: Research IP
Comments are closed