Top organizations reach consensus on definitions for responsible investment

CFA Institute, GSIA, and PRI define key responsible investment approaches

Top organizations reach consensus on definitions for responsible investment

CFA Institute, the Global Sustainable Investment Alliance (GSIA), and Principles for Responsible Investment (PRI) have collaborated to develop a new resource aimed to bring greater understanding and consistency to terminology used in responsible investment. The initiative stems from regulatory calls for standardizing responsible investment terminology, ensuring consistency in the global asset management and wealth management sectors, and combating greenwashing. 

The organizations have defined the following terms: screening, ESG integration, thematic investing, stewardship, and impact investing. In a newly published report, the trio have provided clear definitions, detailed explanations, references to primary inputs, and practical usage guidelines for each term.   

The unified definitions encompass the evolving landscape of responsible investment, expanding their applicability to a wide range of investment styles and asset classes, covering both public and private markets. 

Importance of standardization 

Marg Franklin, president and CEO at CFA Institute, notes the importance of standardizing these terms. “Technical terminology is an important part of professional practice. New terms are always emerging alongside new ideas, and definitions evolve over time,” she says. “It’s important to standardize terms and definitions as practices mature so that professionals can communicate efficiently and effectively with each other as well as with clients, regulators, and other market participants.”   

The collaboration also aims to clarify and harmonize existing terms and definitions rather than introducing new terminology.   

Simon O'Connor, former chair of GSIA, encourages the investment industry and regulators to adopt these definitions for greater consistency. “For many years, our organizations have been working to define and clarify the language of responsible investment. This foundation of experience and expertise enabled us to come together with a common purpose to clarify and harmonize these definitions on a global scale,” he says.     

David Atkin, CEO at PRI, emphasizes the need for transparent communication in the growing field of responsible investment. “Responsible investment has grown significantly, and so have the expectations for clear and transparent communication. Investors need language that enables them to communicate their responsible investment practices accurately, succinctly, and consistently. By unifying around common definitions, we support our signatories and members to communicate with confidence.” 


  • Screening: Applying rules based on defined criteria that determine whether an investment is permissible. 

  • ESG integration: Ongoing consideration of ESG factors within an investment analysis and decision-making process with the aim to improve risk-adjusted returns. 

  • Thematic investing: Selecting assets to access specified trends. 

  • Stewardship: The use of investor rights and influence to protect and enhance overall long-term value for clients and beneficiaries, including the common economic, social, and environmental assets on which their interests depend. 

  • Impact investing: Investing with the intention to generate a positive, measurable social and/or environmental impact alongside a financial return. 

The full ‘Definitions for Responsible Investment Approaches’ report is available online to read.