Sustainable Investing How to speak sustainable investing

How to speak sustainable investing

Sustainable investing is changing the world. We believe that investors can have a positive impact on society and the environment without sacrificing financial returns. But what exactly is sustainable investing? The challenge is that there is no industry-standard definition, so it means different things to different people.

When we talk about sustainable investing at Credit Suisse, we mean investments that consider social, environmental and governance (ESG) aspects alongside traditional valuation criteria in making investment decisions. The goal is generating financial returns. Sustainably.

As well as sustainable investing, there are lots of different terms: SDGs, ESG, Impact investing and green finance. What do they all mean? Here’s our handy guide to navigating different terms in sustainable investing. 

Sustainability

Sustainability assumes that nature and the environment are exhaustible, so we must protect them and use them rationally. It promotes economic development, unifying communities and cultures to achieve satisfactory levels in quality of life, health and education. It aims to establish a more sustainable economy, promoting companies that are well governed and run sustainably.

SDG

The Sustainable Development Goals (SDGs) are a universal call to action to end poverty, protect the planet and improve the lives and prospects of its inhabitants. All UN Member States adopted the 17 SDGs in 2015 as part of 15-year plan to 2030. At Credit Suisse, we work with like-minded private, public and non-governmental organizations to close the gaps identified by these SDGs.

ESG
  • E is Environmental - including the energy a company takes in and the waste it discharges, the resources it needs, and carbon emissions and climate change.
  • S is Social - the way a company interacts with its stakeholders, e.g. labor relations, diversity and inclusion.
  • G is Governance - the internal practices, controls, and procedures a company adopts to govern itself, make effective decisions, comply with the law, and meet the needs of external stakeholders.
Sustainable investing

Sustainable investing refers to an investment strategy that considers environmental, social and governance (ESG) aspects alongside traditional valuation criteria in making investment decisions. Sustainable investments are often aligned with personal values and provide healthy financial returns while fostering positive social and environmental change in line with the UN's Sustainable Development Goals (SDGs).

Impact investing

Impact investing is a subset of sustainable investing. It’s about actively placing capital in enterprises that generate a positive social and/or environmental impact alongside financial returns. Providing capital to support solutions to the world’s most pressing challenges in sectors such as fair agriculture, accessible education, affordable housing, healthcare and access to financial services.

Exclusion approach

Investment products with an exclusion approach do not invest in companies either involved in controversial activities such as severe violations of human rights, or with substantial revenues tied to controversial business areas such as weapons.

Integration approach

Investment products with an ESG integration approach focus on integrating ESG factors into their investment process in combination with financial analysis (selecting companies with best-in-class ESG ratings and top ESG performers in an industry). This is based on industry specific sustainability expertize. The approach is adapted to asset class, product features and investment objectives.

Philanthropy

Philanthropy addresses societal challenges with no generation of financial gain.

Green finance

Green finance refers to any financial instrument or investment – including equity, debt, derivative - issued to finance projects and activities that deliver positive environmental benefits.

Portfolio sustainability check

A portfolio sustainability check involves screening and analyzing a portfolio’s sustainability footprint along exclusions, ESG integration and its carbon footprint.

Green bond

A green bond is a fixed-income product giving the opportunity to back investments that deliver positive environmental impact.

Conservation finance

Conservation finance focuses on the creation of new, long-term and diversified source of revenue that can play a major role in ensuring biodiversity conservation and the health of natural ecosystems. Credit Suisse has long been a pioneer in the conservation finance space.

Blue Economy

The Blue Economy is the sustainable use of ocean resources for economic growth, improved livelihoods and jobs, and ocean ecosystem health. (World Bank).

A sustainable Blue Economy is one that:

  • Provides social and economic benefits for current and future generations
  • Restores, protects and maintains diverse, productive and resilient ecosystems
  • Is based on clean technologies, renewable energy and circular material flows (WWF)

An introduction to sustainable investing and impact investing

Listen to Marisa Drew, CEO of Credit Suisse Impact Advisory and Finance Department, defining sustainable investing.

Listen to the podcast
Marisa Drew on sustainable investing

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