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Sustainable Investing Glossary

Materiality

The relevance of a sustainability factor to a company’s financial performance.

Financially material ESG factors are factors that could have a significant impact – both positive and negative – on a company’s business model and value drivers, such as revenue growth, margins, required capital and risk. The material factors differ from one sector to another. Examples of factors that can be material are supply chain management, environmental policy, worker health and safety, and corporate governance. 

For sustainability to translate into financial performance, it must have an impact on either the amount of cash flow generated by the company, or the cost of external financing to the company (the weighted average cost of capital).

Creating returns that benefit the world we live in
Creating returns that benefit the world we live in
Sustainable investing
Clean Energy Outlook 2021 – Global decarbonization efforts to drive further growth
Clean Energy Outlook 2021 – Global decarbonization efforts to drive further growth
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26-01-2021 | Interview
Climate risk and portfolio decarbonization have become center stage
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Insurance companies are directly exposed to climate risk, and face increasingly tighter scrutiny from regulators regarding its impact on their balance sheets.
14-01-2021 | Interview
Why human production needs to go on a diet
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