Thematic Approaches - InvestMentor

Introduction to Thematic Approaches

Not all ESG strategies are about avoiding harm—some focus on supporting progress.

Positive screening, thematic investing, and best-in-class selection help investors actively choose companies and industries driving real change.

These tools highlight ESG leaders, align portfolios with global priorities like clean energy or healthcare, and offer a way to back solutions while still aiming for strong, long-term financial performance across the investment lifecycle.

Positive (Inclusive) Screening

Positive screening focuses on identifying companies with strong ESG performance rather than excluding poor ones.

Investors look for firms leading in areas like climate action, labor rights, diversity, or transparency.

By directing capital toward top performers, this approach rewards responsible business practices and supports continuous improvement across industries, building a portfolio that reflects both values and opportunity in all market cycles.

Thematic ESG Investing

Thematic ESG investing focuses on companies solving specific environmental or social challenges, such as clean water, renewable energy, sustainable agriculture, or education access.

These investments often align with global goals like the UN Sustainable Development Goals (SDGs).

Investors use this strategy to support meaningful change while capturing growth in sectors expected to benefit from evolving policies, technology advances, and shifting consumer behavior.

Alex Chooses a Renewable-Energy Fund

To expand his ESG portfolio, Alex selects a renewable-energy fund focused on wind, solar, and battery-storage firms.

He believes global demand for clean energy will rise as governments enforce climate policies and consumers shift preferences.

The fund fits his values and long-term goals, while providing exposure to a fast-growing sector.

Alex sees this as a practical way to align sustainability objectives with solid investment opportunities over time.

Best-in-Class Selection

Best-in-class ESG investing means choosing top-rated companies within each industry rather than excluding entire sectors.

For example, an investor may still hold energy or mining stocks but pick those with the best ESG scores.

This allows for diversification and sector exposure while rewarding firms with strong sustainability practices.

It helps balance ethics and performance by backing companies that lead their peers in managing environmental and social risks.

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