Industry bodies agree standardised responsible investment definitions
The guidance is intended as a resource for investors, regulators, policymakers, and market participants, offering clear definitions for responsible investment approaches rather than criteria for product labelling or categorisation.
The guidance provides five key definitions for responsible investing terms: screening; ESG integration; thematic investing; stewardship; and impact investing.
It aims to clarify these existing terms, rather than create new ones, to counter confusion about what different responsible investment strategies seek to achieve by clearly differentiating the objectives of the approaches.
The guidance is intended as a resource for investors, regulators, policymakers, and market participants, offering clear definitions for responsible investment approaches rather than criteria for product labelling or categorisation.
FCA ESG fund labelling rules to be published within the year
Screening is described as applying rules based on defined criteria that determine whether an investment is permissible. ESG integration is described as an ongoing consideration of ESG factors within an investment analysis and decision-making process with the aim to improve risk-adjusted returns.
Thematic investing is defined as selecting assets to access specified trends. Stewardship is designated as the use of investor rights and influence to protect and enhance overall long-term value for clients and beneficiaries, including the common economic, social, and environmental assets on which their interests depend.
Finally, impact investing is described as investing with the intention to generate a positive, measurable social and/or environmental impact alongside a financial return.
It is acknowledged in the guidance that these
Read more on investmentweek.co.uk
