Responsible investment glossary
We recognise that not everyone uses the same language or terminology when talking about stewardship and responsible investment.
This glossary will explain some of the most common terms.
Carbon neutrality is achieved when the amount of carbon dioxide we release into the atmosphere is no more than the amount we take away. This is also referred to as net zero.
Purposeful dialogue between investors and companies on environmental, social and governance (ESG) issues with the intention to influence (or identify the need to influence) company behaviour or improve disclosure.
The systemic and explicit inclusion of environmental, social and governance (ESG) factors into investment analysis and investment decisions.
Exclusions/ Ethical investing
Ethical exclusions funds avoid industries and company practices that cause harm to people or the planet.
Greenwashing is when a company incorrectly promotes their investment options as being responsible.
Investments made with the intention to generate positive, measurable social and environmental impact alongside financial return.
Net zero is achieved when the amount of carbon dioxide we release into the atmosphere is no more than the amount we take away. This is also referred to as carbon neutrality.
Using our rights as shareholders to vote at the Annual or Extraordinary General Meetings (AGM/EGMs) of the companies we invest in, usually electronically.
Responsible investment is an umbrella term used to identify a spectrum of approaches which not only aim to deliver a financial return but are also intentionally seeking to effect positive change. Examples of approaches are: ethical exclusions, responsible practices, sustainable solutions and impact investing.
Responsible practices funds consider the operational practices of the companies they invest in and encourage them to improve their environmental and social performance.
Meeting present needs, without compromising the ability of future generations to meet their needs.
Sustainable funds actively seek to invest in companies that are providing solutions to social and environmental challenges.