globalen
Sustainable Investing Glossary

Positive screening

Investing in companies that show leadership in social and environmental issues, such as employee policies, environmental protection or human rights.

Positive (or affirmative) screening means that rather than excluding companies, investors select companies that set positive examples of environmentally friendly products and socially responsible business practices. Unlike negative screens, which are generally more black and white, positive screens require an analysis of complex issues such as pollution, workplace practices, diversity and product safety. 

Part of a positively screened investment portfolio may consist of smaller companies that have come up with innovative products that enhance the world’s sustainability. Examples are companies generating renewable energy, such as solar power, wind power, and hydrogen fuel cells; manufacturers of natural food and healthy living products; and companies involved in environmental clean-up and recycling. 

A well-diversified portfolio also requires large and medium-sized companies. Larger companies, and the problems they face, are more complex. Positive screening can help determine which of these large companies are heading in a positive direction. Mutual funds and other institutions often use a ‘best-in-class’ approach to positively screen companies. This means that they can include a tobacco company that is showing leadership in its industry, despite the overall record of that particular industry.

Making better-informed investment decisions
Making better-informed investment decisions
Sustainable investing
‘You need a command economy, and this goes against conventional wisdom’
‘You need a command economy, and this goes against conventional wisdom’
Chandran Nair is not one to pull his punches when it comes to dealing with the world’s problems.
11-11-2019 | Interview
Lower credit risk observed in sectors that are positively aligned with the SDGs
Lower credit risk observed in sectors that are positively aligned with the SDGs
Our analysis of historical performance data confirms what we see in practice.
07-11-2019 | Insight
Understanding climate change risk in portfolios
Understanding climate change risk in portfolios
Creating portfolios that are resilient to climate change is not just an issue of decarbonizing, says RobecoSAM’s Jacob Messina.
05-11-2019 | Insight