DEFINITIONS
Screening: The definitions of the three types of screening in the Reporting Framework are as follows:
a. negative/exclusionary screening: The exclusion from a fund or portfolio of certain sectors, companies or practices based on specific ESG criteria;
b. positive/best-in-class screening: Investment in sectors, companies or projects selected for positive ESG performance relative to industry peers; and/or
c. norms-based screening: Screening of investments against minimum standards of business practice based on international norms. Norms-based screening involves either of the following:
1. defining the investment universe based on investees’ performance on international norms related to responsible investment/ESG factors; or
2. excluding investees from portfolios after investment if they are found following research, and sometimes engagement, to contravene these norms. Such norms include but are not limited to the UN Global Compact Principles, the Universal Declaration of Human Rights, International Labour Organization standards, the United Nations Convention Against Corruption and the OECD Guidelines for Multinational Enterprises.
Thematic/ sustainability themed investing: Investment in themes or assets specifically related to sustainability (for example, clean energy, green technology and sustainable agriculture).
Integration of ESG factors: The systematic and explicit inclusion by investment managers of environmental, social and governance factors into traditional financial analysis.