Framework

Three approaches to ESG investing

The question it answers

How do investors build environmental, social and governance criteria into decisions?

Origin
UN PRI (2006); evidence synthesis in Friede, Busch and Bassen (2015)
Diagram type
Comparison table
Level of analysis
Industry
Topics
Corporate financeEthics & corporate governance
Stack of clay coins beside a rising glass bar chart, icon for finance

Diagram

Three approaches to ESG investing

CriterionNegative screeningESG integrationImpact investing
What it doesExcludes sectorsAdds ESG to valuationTargets measurable outcomes
Trade-offNarrower universeData qualityLower liquidity

Sources

References

Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.

  1. Friede, G., Busch, T. and Bassen, A. (2015) ‘ESG and financial performance: aggregated evidence from more than 2000 empirical studies’, Journal of Sustainable Finance & Investment, 5(4), pp. 210–233.doi:10.1080/20430795.2015.1118917Source page
  2. United Nations Principles for Responsible Investment (2006) Principles for Responsible Investment.No DOIunpri.orgSource page