ABSTRACT
Among the most dynamic branches of sustainable finance we find sustainable and responsible investment (SRI) funds. The chapter explores SRI funds' different investment strategies and dives into the ESG (environmental, social, governance) analysis these funds typically use as criteria to allocate investments based on environmental, social and governance principles.
Specifically, we argue that SRI funds promote sustainable behaviour by requiring issuers to obtain ESG ratings as well as by adopting investment strategies ranging from passive (e.g., exclusion criteria of certain sectors or countries) to active strategies (e.g., ESG integration factors and engagement actions by which SRI funds force sustainable business conduct of invested entities).
