What is positive screening?

Positive screening is a strategic approach in sustainable investing where investors choose to include companies or assets in their portfolios based on a strong environmental, social, and governance (ESG) performance compared to their peers. This method emphasizes the proactive identification of investments that not only align with an investor's values but also demonstrate potential for sustainability and responsible business practices.

By focusing on companies that excel in various ESG metrics, investors believe that these firms are likely to perform better in the long term and contribute positively to broader societal goals. This screening approach reflects a commitment to sustainability and the recognition that responsible management can lead to more resilient and successful businesses.

In contrast, the other choices highlight different investment approaches. Some may focus on exclusionary strategies or aimlessly picking investments rather than using rigorous criteria for selecting those that are aligned with ESG objectives. Thus, the focus on strong ESG performance relative to peers is what distinguishes positive screening as a deliberate and impactful investment strategy.