Alpha: Alpha is used in finance as a measure of performance. Alpha, often considered the active return onan investment, gauges the performance of an investment against a market index or benchmark which is considered to represent the market’s movement as a whole. The excess return of an investment relative to the return of a benchmark index is the investment’s alpha.
Environmental, Social and Governance (ESG) Investing: Incorporates an analysis of ESG credentials into the decisionto invest — in addition to traditional financial metrics. It can also encompass efforts by investors to influence the activities of the companies within investment portfolios through voting and engagement, either directly or by an investment manager on the investor's behalf.
Factors: Factor investing is an investment strategy in which securities are chosen based on attributes that are associated with higher returns. Factor investing requires investors to take into account an increased level of granularity when choosing securities; specifically, moregranular than asset class.
Forecasting: The use of historic data to determine the direction of future trends.
Materiality Map: Identifies likely material sustainability issues on an industry-by-industry basis. This map serves as a snapshot of likely material sustainability issues at the time of our initial analysis and may be subject to change as issues and industries are ever-evolving.
Quality: Quality has long been established as an investment approach, dating back to Benjamin Graham, but it is less well accepted as a factor, especially when compared with value, size, yield, momentum and low volatility.
SASB: Established in 2011, the Sustainability AccountingStandards Board (SASB) is an independent, private-sectorstandards setting organization based in San Francisco,California dedicated to enhancing the efficiency of thecapital markets by fostering high-quality disclosure of material sustainability information that meets investorneeds. The SASB develops and maintains sustainability accounting standards—for 79 industries in 11 sectors—that help public corporations disclose financially material information to investors in a cost-effective and decision use full format. The SASB’s transparent, inclusive, andrigorous standards-setting process is materiality focused, evidence-based and market informed.
Signal: A term used interchangeably with Alpha, is ameasure of performance, the excess return of an investment relative to the return of a benchmark index.
Valuation: A valuation is the process of determining the current worth of an asset or company.
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