ESG and Sustainable Investing: From Theory to Practice — Vietnam Readiness · Dr MAI Huu MinhChapter 8 of 22 · Module 3: Strategies
CHAPTER 8
Exclusions and Screening
Negative and norms-based screening
Opening question
“If I exclude tobacco, weapons and coal, how much do I lose?”
In this chapter
- Why investors exclude: values, risk, international norms and the law
- The most common activity exclusions and how they are defined
- Revenue thresholds, from zero tolerance to 30%, with a worked example
- Norms-based screening against the UN Global Compact and OECD Guidelines
- How screens are implemented in an index or fund
- The cost of exclusions: sector bets and tracking error, with a worked example
- Whether exclusions change corporate behaviour
- Coal, alcohol, gambling and market structure in Asia and Vietnam
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This chapter is in the full book
Chapter 1 is free to read online. The full text of chapter 8 — with its tables, figures, worked examples and practice lab — is available in the complete edition of ESG and Sustainable Investing: From Theory to Practice — Vietnam Readiness (Volume 4, NXW Investment Library).
Read Chapter 1 freeGet the full book — contact@nxw.vnSections of this chapter
8.1 The oldest strategy
8.2 Why investors exclude
8.3 Negative screening by activity
8.4 Revenue thresholds
8.5 Norms-based screening
8.6 How screens are implemented
8.7 The cost of exclusions: sector bets and tracking error
8.8 Do exclusions change the world?
8.9 Exclusions in Asia and Vietnam
8.10 Designing an exclusion policy