Are You a Responsible Investor?

Overview of Responsible Investment and the Macro Debate on ESG

• Responsible investment includes incorporating ESG factors into decision-making and active ownership.
• There are different sub-sections of responsible investment, including SRI, Best in Class, Sustainable, Thematic, Green, Social Investment, Impact Investment, and Ethical Investment.
• Shareholder engagement reflects active ownership by influencing corporate decisions either through dialogue or voting.
• Triple bottom line accounting considers people, planet, and profit, and recognizes the dynamic between ESG issues and the risk, volatility, and long-term return of securities and investments.
• Corporate sustainability aims to create long-term stakeholder value by focusing on ethical, social, environmental, cultural, and economic dimensions of doing business.
• The macro debate on ESG focuses on the benefits and challenges of incorporating ESG into decision-making and the linkages between responsible investment and financial system stability.
• Climate change is a growing global risk, and there is a need to address it through responsible investment.
• Fiduciary duty was once seen as a barrier to ESG integration, but it is now recognized that financially material ESG factors must be incorporated into decision-making.
• The UNEP FI and PRI have established voluntary principles for responsible investment, which include incorporating ESG issues into investment analysis, seeking appropriate disclosure on ESG issues, and promoting acceptance and implementation of responsible investment principles.
• Each company faces unique challenges related to culture, business model, and supply chain model when incorporating ESG factors.
• The efficacy of shareholder engagement depends on the scale of ownership, quality of dialogue/method used, and whether the company has been informed divestment is possible.
• Impact investment focuses on specific positive and measurable impacts (social or environmental) alongside a financial return, and can have diverse financial return expectations.

Overview of Responsible Investment and the Macro Debate on ESG

• Responsible investment includes incorporating ESG factors into decision-making and active ownership.
• There are different sub-sections of responsible investment, including SRI, Best in Class, Sustainable, Thematic, Green, Social Investment, Impact Investment, and Ethical Investment.
• Shareholder engagement reflects active ownership by influencing corporate decisions either through dialogue or voting.
• Triple bottom line accounting considers people, planet, and profit, and recognizes the dynamic between ESG issues and the risk, volatility, and long-term return of securities and investments.
• Corporate sustainability aims to create long-term stakeholder value by focusing on ethical, social, environmental, cultural, and economic dimensions of doing business.
• The macro debate on ESG focuses on the benefits and challenges of incorporating ESG into decision-making and the linkages between responsible investment and financial system stability.
• Climate change is a growing global risk, and there is a need to address it through responsible investment.
• Fiduciary duty was once seen as a barrier to ESG integration, but it is now recognized that financially material ESG factors must be incorporated into decision-making.
• The UNEP FI and PRI have established voluntary principles for responsible investment, which include incorporating ESG issues into investment analysis, seeking appropriate disclosure on ESG issues, and promoting acceptance and implementation of responsible investment principles.
• Each company faces unique challenges related to culture, business model, and supply chain model when incorporating ESG factors.
• The efficacy of shareholder engagement depends on the scale of ownership, quality of dialogue/method used, and whether the company has been informed divestment is possible.
• Impact investment focuses on specific positive and measurable impacts (social or environmental) alongside a financial return, and can have diverse financial return expectations.

Test your knowledge on responsible investment and the macro debate on ESG with this informative quiz. Explore the different sub-sections of responsible investment, such as SRI and impact investment, and learn about shareholder engagement and triple bottom line accounting. Discover the benefits and challenges of incorporating ESG into decision-making and the principles established by UNEP FI and PRI for responsible investment. Take this quiz to enhance your understanding of responsible investment and its role in promoting financial system stability and addressing global risks such as climate change