Types of screening!

From a broad perspective, the approach to ESG investing can be divided into two. Investors are either looking for companies that rank higher according to ESG metrics, or avoiding those that rank lower.

This is the idea of Positive and Negative screening. Via Negative Screening, the investor seeks to avoid companies whose business activities are detrimental to the environment or society. On the other hand, via Positive Screening, what the investor is searching for are companies that actively create a benefit in accordance with ESG.

Interestingly, according to the Global Sustainable Investment Review 2020 (published in 2021), Europe’s primary Sustainability strategy is Negative Screening. Corporate Engagement and Shareholder action, followed by overall ESG integration take the 2nd and 3rd place.

Hopefully positive screening will take a more prominent role as we move forward! Looking forward to the next publication!


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Really interesting take on screening and it’s helpful to draw the distinction between positive and negative screening. I agree let’s hope for a shift towards more positive screening as it’s likely to be a better incentive for progress.