Name a common sustainable investing strategy.

Negative screening is a well-established sustainable investing strategy that involves the exclusion of specific sectors, companies, or practices that do not align with certain environmental, social, or governance (ESG) criteria. This approach allows investors to avoid assets that they perceive as harmful to society or the environment, thereby aligning their investment portfolios with their ethical beliefs and values. By excluding sectors such as fossil fuels, tobacco, or companies with poor labor practices, investors can focus their capital on businesses that engage in responsible practices and contribute positively to sustainability goals.

This strategy acknowledges the growing awareness of the societal and environmental impacts of businesses and the increasing demand for accountability in corporate behavior. It also reflects a broader trend in finance where investors are blending traditional financial criteria with ESG considerations, leading to a more holistic view of risk and opportunity.

Negative screening serves both as a filtering mechanism and a way to promote positive behavior in the business landscape by encouraging companies to adopt better practices, understanding that careless actions might lead to exclusion from investment portfolios.