Which of the following is NOT a typical way in which asset managers integrate ESG?

The integration of ESG factors by asset managers typically involves various practices aimed at enhancing investment decisions and managing risks related to environmental, social, and governance issues. Options A, B, and C reflect conventional methods asset managers use to incorporate ESG considerations into their investment processes.

Using ESG as a threshold requirement before investments can be considered is a common practice where certain ESG criteria must be met for an investment to be eligible. This ensures that the portfolio aligns with specific sustainability goals right from the outset.

Using ESG as a factor that informs the valuation indicates that asset managers consider ESG factors as integral to assessing a company's worth, recognizing that sustainability practices can influence long-term financial performance.

Using ESG as a risk assessment tool highlights the importance of understanding how ESG issues can pose significant risks to investments. By assessing these risks, asset managers can gain greater confidence in the valuations of their holdings.

On the other hand, using ESG as a basis for explaining investment holdings to clients, while relevant, does not directly integrate ESG into the investment decision-making process. Instead, it refers more to communication and client relations than to the methodologies employed in portfolio management. Therefore, it is not typically considered an integration method like the others.