Positive Screening

While the original screening done within the SRI industry was primarily negative screening, in which investors wished to exclude various companies from their investment universe, recently positive screening has become quite widespread.

These positive screens can take a wide variety of shapes. They can look for best-in-class companies in regard to overall ESG performance or focus on the best-in-class companies in the more specific areas of environmental, social or governance performance.  For example, an investor could create a positive screen in regard to the response of companies to the changing dynamics created by climate change.

Another type of positive screening is often called “pioneer screening.”  This approach looks for companies that are on the cutting edge of extra-financial performance trends, such as women in management or tracking the sustainability practices of their supply chain.  Investors can use ASSET4 data to rate and rank based on their leadership in these or any ESG aspect.

In addition, either broad or narrow thematic screens can be created as well focused on companies with direct social or environmental benefit such as those pursuing green technology, energy, construction or transportation.