africaen
Sustainable Investing Glossary

Best in class

The best-in-class approach for sustainable investing means finding the companies that are leaders in their sector in terms of meeting environmental, social and governance (ESG) criteria.

It is commonly used in positive screening as a means of finding those companies with superior pre-defined ESG characteristics, regardless of their industry. Both positive and negative screening are always done in peer comparison; best-in-class is by definition the leaders of a peer group according to the desired ESG metrics. 

An investor who follows the best-in-class principle does not necessarily exclude more controversial sectors or industries such as thermal coal or alcohol. Instead, they invest in the companies that make the most effort to meet the ESG criteria that are relevant for their respective industries. 

The most sustainable companies in a sector – also referred to as best practice – are often used as a benchmark to be equalled or surpassed. The Dow Jones Sustainability Indices follow the best-in-class principle: out of the 2,500 corporations listed in the Dow Jones Global Index, a selection is made every year of the 10% of companies in a given sector that best meet certain ESG criteria. No industries are excluded from this process. 

The best-in-class approach can therefore be used to stimulate competition among companies for inclusion in the indices. To remain in the index, companies have to continually intensify their sustainability initiatives, to the benefit of investors and society as a whole.

See also: Negative screening, Positive screening, Exclusions

Creating returns that benefit the world we live in
Creating returns that benefit the world we live in
Sustainable investing
Upgrading the grid is an urgent global priority
Upgrading the grid is an urgent global priority
A redesigned, rebuilt electricity network is a crucial enabler of the energy transition.
30-09-2022 | Insight
SI Dilemmas: To share or not to share IP – that is the question
SI Dilemmas: To share or not to share IP – that is the question
In August, Robeco announced that we are sharing our sustainable investing intellectual property, starting with our SDG framework.
29-09-2022 | SI Dilemmas
You have reached the next level: Sustainable Finance Disclosure Regulation Level II
You have reached the next level: Sustainable Finance Disclosure Regulation Level II
The EU Sustainable Finance Disclosure Regulation Level II will be in effect as of January 2023.
29-09-2022 | Webinar
Logo

Disclaimer

Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports, which can be all be obtained free of charge at this website and at the Robeco offices in each country where Robeco has a presence.

Please confirm that you are a professional investor and/or institutional investor and that you have read, understood and accept the terms of use for this website.

I Disagree