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Key Concepts
The following is listing of the key definitions the Responsible Investment Working Group (RIWG) agreed upon and referenced during their deliberations.
Responsible Investing (RI)
“Investing that integrates environmental, social and governance (ESG) factors. Responsible investing is related to but distinct from ethical investing, socially-responsibly investing, impact investing and green investing, and is increasingly driven by a business case rationale rather than moral rationale. RI encompasses a range of strategies, including ESG integration, positive screening, and best-of-sector screening.”1
Socially Responsible Investing
“Investing that considers environmental, social and governance (ESG) factors but typically driven by a moral case rather than a business case. May be more likely than mainstream responsible investing to include negative screens on entire sectors, such as tobacco, gambling, alcohol, or weapons.”2
Environmental, Social and Governance (ESG) Investing
“An investment practice that involves integrating the three ESG factors into fundamental investment analysis to the extent that they are material to investment performance.”3
Fossil Fuel Divestment or Fossil Fuel Free
“An investment strategy based on the exclusion of fossil fuel companies from a portfolio. Advocates of this strategy state that there are 200 publicly-traded companies that hold the vast majority of the world’s proven coal, oil and gas reserves. They’re asking universities, charitable foundations, pension funds and other institutions to divest from these companies, as well as pipeline companies responsible for the expansion of fossil fuel projects.”4
Impact Investing
“Impact investments are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending on investors' strategic goals.”5
Carbon Underground 200 (CU200)
The Carbon Underground 200 represents the top publicly-traded coal, oil, and gas reserve-owning companies globally, ranked by the carbon emission potential of their reported fossil fuel reserves.6
Notes
1 Canadian Association of University Business Officers, “Building a Toolkit for Effective, Ethical and Responsible Reponses to Divestment Campaigns,” page 7, Feb. 2017.
2 Canadian Association of University Business Officers, “Building a Toolkit for Effective, Ethical and Responsible Reponses to Divestment Campaigns,” page 7, Feb. 2017.
3 Commonfund Institute, “Commonfund Study of Responsible Investing,” page 2, April 2015.
4 Responsible Investment Association, “Glossary”
5 Global Impact Investing Network, “What is impact investing”