Table 1 A typology of sustainable investments

From: Impact investments: a call for (re)orientation

  Sustainable investments
ESG-screened investments ESG-managed investments Impact-related Investments
Impact-aligned investments Impact-generating investments
Objective
(underlying strategic purpose of the investment)
Mitigation of ESG-related risks and/or ethical considerations Systematic reflection on ESG-related risks and opportunities Address social and environmental challenges and goals Actively contributing to social and environmental solutions and transformations
Materiality
(measurement of tangible real-world parameters)
Materiality not addressed, i.e., no further detailed description of approach or outputs Materiality not measured, i.e., only basic description of approach or outputs Proof of materiality through the assessment of outputs via benchmark analysis or SDG alignment Proof of materiality through the measurement of expected and generated impact
General approach
(applied investment appraisal)
Any consideration of E, S, or G factors in investment appraisals; typically focusing on exclusion criteria Comprehensive set of exclusion criteria; at least one further pre-investment decision approach* is applied Comprehensive set of exclusion criteria; sophisticated combination of pre- and post-investment** decision approaches Focus on impact generation by providing additional capital, incorporating forward-looking targets and/or post-investment** decision approaches
Documentation
(efforts to increase transparency)
No detailed documentation Basic description and ideally external verification Detailed description and external verification Detailed description and external measurement of impact achievements and targets
  1. *Pre-investment decision approaches: exclusions, norms-based screening, best-in-class, ESG integration, thematic funds
  2. **Post-investment decision approaches: voting, engagement