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● Social
This category analyzes the company’s business relationships. In other words, this refers to the
social impact an individual company or fund has within society and how it advocates for change
within the wider community and social good. Analysts look closely at a company’s participation

and stances on social issues such as community engagement, human rights and the health and
safety of its employees and board members.
● Governance

About governance, investors may want to know that a company uses transparent and correct
accounting methods and that stockholders are allowed to vote on important issues. Plus,
governance encompasses reviewing the quality of management and the board, shareholder
rights, executive compensation and diversity, overall transparency and revealing, anti-corruption,
and even corporate political contributions (Corporate Governance Institute, 2021).

Sustainable investors

Sustainable investors include individuals, including average retail investors to very high net worth

individuals and family offices, as well as institutions, such as religious institutions, nonprofit
organization and so on. There are numerous of investment management firms that offer
sustainable investment funds and vehicles for these investors.

More specific, investments managed by professional asset managers are often classified as
either institutional or retail. On the one hand, retail assets are personal investments by individuals
in professionally managed funds purchased in banks or through investment platforms with
relatively low minimum investment levels. On the other hand, institutional assets are managed on
behalf of institutional asset owners such as universities, pension funds, foundations and insurers
through investment products with higher minimum investment levels (International Institute for
Sustainable Development, 2020).

Even though investors within each group can be quite diverse, it is still probable to identify a
common set of drivers behind their interest in sustainable investing:

PRIVATE INVESTORS

• Demand for investments in line with their moral and personal values

INSTITUTIONAL INVESTORS

• Demand from their components to integrate sustainability considerations

• Policy risk—new regulations addressing ESG concerns

• Better understanding of how to price ESG and climate-related risks and therefore better
consciousness about their financial materiality
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