There are various sustainable investment strategies, each with its unique characteristics. Think of them as tools to use and a combination of these working together will be most effective for your goals:
Divestment is when we sell off shares in high-carbon industries (fossil fuels, heavy emitters) to reduce our financial exposure and signal disapproval of these business practices.
Active Ownership (Buy and Engage) is when we hold shares in any company, which could include high-emissions companies, to influence their direction through shareholder resolutions, proxy voting, and direct engagement with management.
Best-in-Class Investing is when we choose to invest in the most sustainability-forward companies within each industry rather than excluding entire sectors.
Thematic Investing is when we invest in companies and sectors that are specifically focused on addressing sustainability, including clean energy and electric cars.
Net-Zero-Aligned Portfolios (like Paris Aligned Benchmarks) is when we only invest in companies that are aligned with 1.5°C warming targets and exclude those that fail to meet emissions reduction criteria.
Impact Investing is when we directly fund sustainable solutions such as clean energy and climate tech through private investments including angel and venture capital.
Climate-Linked Financial Products are financial products like green bonds and sustainability-linked loans where the proceeds finance sustainable projects.
ESG Investing is when we select companies that effectively manage environmental, social, and governance risks, focusing on those that are better prepared for the challenges ahead.