Our definitions

How do we define our purpose? What does effective stewardship mean to us? Our definitions around the concept of responsibility in investing demonstrate how we aim to achieve positive outcomes for our stakeholders.

To reveal our definitions, click on the tiles below.

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Active Management

(Also referred to as active investing)

Actively selecting investments based on an investment team’s own judgment, research and experience rather than an asset’s index weighting. An actively managed fund is not a tracker fund.

Active Ownership

(Also referred to as engagement)

Using the rights of influence as financial stakeholders to actively engage companies or assets and other stakeholders to further the long-term interests of end investors. This consists of objective-driven dialogue seeking positive and sustainable change in the purpose, governance, strategy operations and in the impact on the environment and society.

Active Share

A measure of the percentage of a fund that is invested differently than its benchmark. It expresses how active the fund manager is. (See ‘Active Management’.)

Advocacy

(Also referred to as public policy engagement)

Actively seeking to influence change in public policy in the interests of investors and the wider society by engaging with policymakers, regulators and industry bodies on a range of issues. These include: the financial system and investment industry, corporate governance, business purpose, climate change, inequality and inclusion.

ESG factors

Environmental: climate change, mitigation and adaptation, natural resource stewardship (including marine and biodiversity protection), pollution, waste and the circular economy.
Social: human rights, indigenous people’s rights, child and slave labour, anti-bribery and corruption, employee matters inclusion and diversity, health and safety, ethics, conduct and culture.
Governance: board composition, succession planning, executive remuneration, minority shareholder rights and protections, and investor stewardship.

Please note, the items listed above for each factor are not exhaustive. They are examples of adverse impacts that are included solely for illustrative purposes.

ESG integration

A responsible investing approach which systematically and consequentially integrates financially material ESG factors and engagement insights alongside traditional performance factors and consideration of adverse impacts in investment analysis and investment decisions.

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ESG leaders

(Also referred to as positive screening)

A responsible investing approach which invests in assets who have best-in class practices on material ESG factors.

Ethical investing

An investment strategy that excludes sectors or behaviours that reflect a set of values including moral or ethical beliefs.

Exclusions policy

An investment firm or team’s policy to exclude investments from specific sectors, business activities and/or behaviours from their investment universe.

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Exclusions investing

A responsible investing approach which excludes investments from specific sectors, business activities and/or behaviours from the investment universe.

Impact investing

Purposefully targeting companies which can generate positive social or environmental outcomes in addition to financial gains. Impact investors mainly target investments that are able to provide solutions which make a positive contribution towards the attainment of the 17 Sustainable Development Goals (SDGs).

Sustainable Development Goals (SDGs)

Convened by the UN, the Sustainable Development Goals (SDGs) are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including those related to poverty, inequality, climate change, environmental degradation, peace and justice. There are 17 goals, 169 targets, and progress towards these targets are tracked by 232 indicators inherent in the goals.

SDG engagement

Engaging with investments (or assets) for positive social and environmental outcomes that support the attainment of the SDGs.

SDG engagement-driven investing

An investment strategy which identifies SDG-aligned engagement opportunities that enhance long term financial stakeholder value and address a specific societal or environmental need in addition to delivering strong financial returns for investors.

SDG investing

Investing in assets with the expressed intention to create a measurable, positive, real-world outcome to support the attainment of specific SDGs and generate superior sustainable financial returns.

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Socially responsible investing (SRI)

An investment strategy which excludes sectors or behaviours that reflect an investor’s moral or ethical beliefs; and/or an approach that promotes social or environmental objectives in its investments.

Sustainable investing

Investing and engaging to deliver positive societal and environmental outcomes at investee companies leading to better performing businesses and enhanced financial returns over the long term.

Stewardship

The role in which investment managers use the rights – if not the obligation – of financial stakeholders to engage with companies or assets to pursue the objective of sustainable wealth creation for investors.

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Thematic Investing

There are two broad types of thematic investing:

Thematic investing (social or environmental):
An investment approach that promotes specific social or environmental themes, and often allows investors to express their values. It can exclude ESG laggards or target the best ESG performers or invest in the most impactful companies.
Thematic investing (megatrends):
An investment approach that focuses on powerful, long-term global themes or megatrends that are both structural and transformative in nature.

Voting

Exercising the rights given to equity holders in companies to vote on business matters and director elections during annual and extraordinary general meetings.

Useful industry terms

Our list of industry terms might help you while browsing our website and product range.

A–Z

Carbon footprint

A measure of a group, individual or a company’s total greenhouse gas emissions.

Carbon pricing

The economic cost of emitting CO2 into the atmosphere, either in the form of a fee per unit of emissions or an incentive for reducing emissions.

COP

An annually held UN conference. The Paris Agreement was negotiated at the 21^st conference in 2015.

Corporate governance

The system of rules, practices and processes by which a company is managed, directed and controlled.

Corporate responsibility

A company’s duty to operate in a manner that does not harm the environment or society, and to take responsibility for its actions and their impact on employees, stakeholders and communities.

Fiduciary duty

Fiduciary duties ensure that those who manage other people’s money act in the interests of beneficiaries, rather than serve their own interests.

Green bond

Debt securities which are used to fund projects with environmental benefits.

Greenwashing

The act of making a product, service or organisation seem more environmentally friendly than it actually is.

Integrated reporting

Company reporting that integrates both sustainability and financial information in one source.

Paris Agreement

An international accord, agreed at COP 21 in Paris in 2015, that aims to limit the rise in global average temperatures to below 2°C compared to pre-industrial levels.

Principles for Responsible Investing

Developed by investors, the six Principles for Responsible Investment are a voluntary and aspirational set of investment principles that offer a set of possible actions for incorporating ESG issues into investment practices.

Proxy voting

A ballot cast by one person on behalf of the others. As many shareholders cannot attend annual and special meetings, companies allow shareholders to cast proxy votes.

Shareholder Rights Directive II

A directive from the European Union that aims to strengthen the position of shareholders and to ensure that decisions are made for the long-term stability of a company.

Social bond

Debt instruments that raise funds for projects with positive social outcomes.

Stewardship codes

Codes that offer guidance on investor engagement and transparency about how investors should exercise their ownership and governance responsibilities. The first stewardship code was introduced in the UK in 2010 and almost all OECD jurisdictions now have national codes or principles.

UN Global Compact

A global corporate sustainability initiative that calls on companies, investors and other participants to align their strategies and operations with universal principles on human rights, labour, the environment and anti-corruption.

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Key elements of responsible investing

Which analytical tools and disciplines separate the best from the rest?

Responsible investing in action

We provide evidence of our efforts towards best-practice investment, stewardship and advocacy.

Want to know more about our focus on enduring, responsible wealth creation?

Investments

Our capabilities provide the key.

Sustainability

Our capabilities provide the key.

EOS Stewardship

Clarifying complexity on the path to enduring, responsible wealth creation

Carbon footprint

Carbon pricing

COP

Corporate governance

Corporate responsibility

Fiduciary duty

Green bond

Greenwashing

Integrated reporting

Paris Agreement

Principles for Responsible Investing

Proxy voting

Shareholder Rights Directive II

Social bond

Stewardship codes

UN Global Compact

Key elements of responsible investing

Responsible investing in action

The value of investments, and income from them, may go down as well as up, and you may not get back the original amount invested.

Sustainability.
We mean it.

Your preferences

CONNECT

Investments

Our capabilities provide the key.

Sustainability

Our capabilities provide the key.

EOS Stewardship

Our definitions

Clarifying complexity on the path to enduring, responsible wealth creation

Carbon footprint

Carbon pricing

COP

Corporate governance

Corporate responsibility

Fiduciary duty

Green bond

Greenwashing

Integrated reporting

Paris Agreement

Principles for Responsible Investing

Proxy voting

Shareholder Rights Directive II

Social bond

Stewardship codes

UN Global Compact

Key elements of responsible investing

Responsible investing in action

The value of investments, and income from them, may go down as well as up, and you may not get back the original amount invested.

Sustainability. We mean it.

Your preferences

CONNECT

Sustainability.
We mean it.