Positive screening
Positive screening can be used by charities to further their aims and encourage responsible business practices. It involves investing in companies with a commitment to responsible business practices, that produce positive products and services or that address environmental or social challenges.
In this section:
What is positive screening?
Forms of positive screening
Reasons for using positive screens
Ways of using positive screens
Common positive screening issues
Further information
What is positive screening?
Positive screening involves investing where there is a commitment to responsible business practices, and/or positive products and services. It is also known as support or preference.
Forms of positive screening
Forms of positive screening include:
- investing in companies that sell positive products – for example educational material or essential necessities of life (food, clothing, electricity, water or housing)
- thematic investing – investing in specific areas such as environmental technology
- a best-in-class approach – favouring investments with best practice amongst sector peers. This approach allows sector balance within the investable universe.
Reasons for using positive screens
Your charity clients may wish to use positive screening to:
- further the aims of their charity
- select investments which perform well according to social, environmental and financial criteria
- encourage responsible business practices
Ways of using positive screens
Your charity clients may wish to:
use the services of a research organisation to identify companies that meet their positive screening criteria
ask fund managers to apply positive screens to their investments
select a pooled fund that uses positive screens which fit with their needs
Positive screening can be used on its own or in combination with other strategies such as negative screening or engagement.
It can be applied to a range of asset classes such as equities, bonds or private equity.
Common issues
Issues that are a common focus for positive screening include
- Environment
- Treatment of staff, suppliers and customers
- Interaction with local communities
- Positive products and services
- Governance and accountability
Further information
UKSIF’s online training course provides guidance on selecting a positive screening approach and understanding how they are applied.
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