Unit 54: Ethical investment

Institutional investors

Are organizations that invest large amounts of money on behalf of others, e.g. pension funds, insurance companies, government investment funds, universities, hospitals, …

Investment funds

Funds that group together the money of many different investors

Good corporate governance

Refers to the system of rules, practices and processes by which a company is directed.

Activist shareholders

They take a more active role in the way that the companies they invest in are run.

Ethical investment fund

A type of investment fund that only invests in companies or projects that meet certain ethical, environmental or social criteria. (tries to make money while doing good, doesn’t support sectors like tobacco, nuclear power,…)

transparency

Being open, honest and clear about information, decisions and actions. (not hiding anything)

Accountability

Being responsible for your actions and being willing to explain or justify them.

FTSE4Good

A series of stock market indexes that track companies meeting high standards for environmental, social and governance practices.

Index

A measurement or list used to track the performance of a group of assets, like stocks, companies,… It helps investors see how a particular market or sector is doing over time.

Ethically managed companies

Business that operate in a responsible way, focusing on doing what’s right for their employees, customers, the environment and society as a whole.

Dow Jones Sustainability indexes

A series of stock market indexes that track the performance of companies leading in sustainability across economic, environmental and social factors.

DJSI World

Contains the shares of 300 companies from 23 countries that lead their industries in terms of sustainability

DJSI Stoxx

180 companies from 14 European countries.

Sustainability

Taking care of the planet, people and business in a way that doesn't harm future generations. It’s about using resources wisely and protecting the environment.

Corporate sustainability

refers to a company’s efforts to operate in a way that is environmentally friendly over the long term.

Strategy

Incorporating long-term economic, environmental and social factors into business strategies while staying competitive and maintaining a strong brand reputation.

Financial

Meeting shareholders’ demands for strong financial returns, long-term economic growth, open communication and transparent financial accounting.

Customer and Product

Building loyalty through customer relationship management and innovation that uses financial, natural and social resources efficiently for long-term success.

Governance and stakeholder

Setting the highest standards of corporate governance, engaging stakeholders and being transparent in reporting.

Human

Managing employees to keep skills high and satisfaction strong through top learning knowledge-sharing and reward programs.

Socially responsible investment (SRI)

An investment strategy where investors choose companies based on ethical, social or environmental values.