Positive & negative ESG investing

In this article:

This article covers the practical side of ethical investing, through the use of positive and negative filters across your investment portfolio.

So, we know that companies and investments with higher Environmental, Social, and maybe even Governance principles can offer the same or better returns compared to less ethical or ESG-focused companies. 

But how do we (as direct share investors) or other investors (ETF providers, Super funds, etc) actually do it? 

Positive and negative filters

One way is by using positive and negative filters.

Negative filtering is the process for avoiding investing in companies or investments according to ESG principles. So, companies that score really poorly for things such as Governance (G) or emit excessive carbon dioxide (E) can be filtered away. 

By contrast, positive screening allows you to find companies or investments that you believe ‘do good’ or ‘do better’.

You can then increase your investments in these companies as a show of support for their business model and stance on ESG policies.

Want to learn how to put this into practice? Get started today by taking our free ethical investing course on Rask Education (what’ve you got to lose)!

Owen Raszkiewicz

Owen Raszkiewicz

Owen is the Founder of Rask, Lead Investment Analyst for Rask Invest and head educator at Rask Education. Prior to founding Rask, Owen was an investment analyst at the highly regarded managed funds research business Zenith Investment Partners and a Writer/Analyst for The Motley Fool Australia. Owen’s formal qualifications include a Master of Applied Finance and Master of Financial Planning from Kaplan Professional, Bachelor of Technology (Information Systems) from Swinburne University of Technology, Advanced Diploma of Financial Services (Financial Planning) and Diploma of Mortgage Broking Management. He's also completed level 1 of the Chartered Financial Analyst (CFA) program.

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