Responsible Investing: What’s the Difference Between Screens and Integration?
Responsible investing covers a diverse set of priorities. Yet when it comes to portfolio-construction techniques used to reflect these considerations, investors really have only two distinct methods to choose from—screens and integration (also often referred to as a tilt). Both can enhance a portfolio’s ESG characteristics, but they’re quite different in terms of implementation and impact.
In this paper we look at screens and integration techniques and use a carbon emissions example to illustrate how the two techniques, in pursuit of a similar goal, can produce varying portfolio outcomes.