ESG strategies
EXTERNAL ARTICLE
Estimated reading time: 4 min.
WHY ESG STRATEGIES MATTER
ESG (Environmental, Social, and Governance) and SRI (Socially Responsible Investment) funds have become a growing trend driven by:
- International regulations,
- Client expectations for responsible finance,
- And a proven link between performance and ESG strategies.
As a result, ESG is no longer a niche approach but a core component of asset management strategies worldwide.
MAJOR ESG INVESTMENT APPROACHES
There are 3 major ESG approaches, from which multiple strategies can be designed:
- Positive screening or Best in class – favoring firms with strong ESG practices.
- Negative screening or criteria-based exclusions – excluding industries or companies that do not meet ESG standards.
- Thematic or impact investing – targeting sectors or projects that directly address sustainability challenges.
Beyond these, asset managers increasingly rely on combinations of strategies to strengthen portfolios and meet both regulatory and investor expectations.
STUDIES LINKING ESG AND PERFORMANCE
Research continues to show that ESG is not just about ethics — it has a direct impact on long-term performance. Key studies include:
- Robert G. Eccles, Ioannis Ioannou, and George Serafeim (2011)
- Søren Hvidkjær (2017)
- Lloyd Kurtz and Dan diBartolomeo (2011)
- Emiel van Duuren, Auke Plantinga, and Bert Scholtens (2016)
These works highlight the positive correlation between ESG integration and both financial resilience and risk management.
ESG INVESTMENTS AND STRATEGIES
For a deeper understanding of ESG concepts, frameworks, and case studies, explore these resources:
- MSCI – What is ESG?
- Degroof Petercam – Sustainability blog
- CFA Institute – Guidance and Case Studies for ESG Integration
KEY TAKEAWAY
Whether through screening, thematic investments, or combined strategies, ESG integration is becoming a standard in asset management. With regulatory pressure, client demand, and a clear link to performance, ESG is no longer optional — it is strategic.
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COMMON QUESTIONS ABOUT THIS TOPIC
Title
What are the main types of ESG strategies used by asset managers?
The three major approaches are: (1) positive screening / “best-in-class”; (2) negative screening / exclusion-based; and (3) thematic or impact investing. Many firms combine these strategies for greater effect.
Title
Why have ESG strategies become core to portfolio management?
Because of increasing regulatory pressure, rising investor demand for responsible finance, and mounting research showing a link between ESG integration and long-term performance and resilience.
Title
How should asset managers select or design an ESG strategy according to their mandate?
They should align their ESG strategy with client expectations, regulatory requirements, and measurable outcomes — whether through exclusions, screening, thematic tilts or impact objectives — and integrate them into the investment process.
Title
Does ESG integration necessarily sacrifice financial returns?
Not necessarily. Studies cited by AMINDIS show that companies with strong ESG practices may exhibit better risk-adjusted returns in the long term, making ESG integration a strategic rather than purely ethical choice.
Title
What is the key takeaway for asset owners and managers when implementing ESG strategies?
ESG integration is no longer optional: it’s strategic. Whether via screening, thematic investment or combined approaches, ESG must be embedded in portfolio strategy, risk management and reporting to meet both performance and regulatory expectations.