E X ECUTIVE S UMMAR Y
Defining Sustainable Investment Sustainable investment goes by many names – “socially responsible,” “ethical,” “sustainable & responsible,” “Environmental, Social, and Governance (ESG),” and “impact,” among others – but generally follows three broad approaches: (1) screening out companies that violate certain values (such as divesting from coal, tobacco, weapons, or other “sin” stocks) and/or positively screening for companies that uphold values or perform well on ESG factors; (2) impact investing in organizations or projects that have social or environmental aims; and (3) integrating ESG factors into traditional financial analysis.3 Once a company is in an investor’s portfolio, they may further advance sustainability objectives through engagement with management and shareholder voting. This paper focuses on how labor and other human rights factors are currently defined and measured for use across these approaches.
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