Glossary

De-jargoned: Glossary of ESG terms

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There are currently 9 relevant ESG terms in this directory beginning with the letter D.
Development Finance
Official Development Finance (ODF) describes funds from official development finance institutions to developing nations with the objective of reducing poverty and developing the economy of recipient countries. This includes (A) bilateral official development assistance (ODA), (B) grants and concessional and non-concessional development lending by multilateral financial institutions, and (C) other official flows for development purposes (including refinancing Loans) which have too low a Grant Element to qualify as ODA. [Source: Swiss Sustainable Finance]

Development Finance Institution
DFIs occupy the space between public aid and private investment. They are financial institutions, which provide finance to the private sector for investments that promote development. They focus on developing countries and regions where access to private sector funding is limited. They are usually owned or backed by the governments of one or more developed countries. [Source: Swiss Sustainable Finance]

Development Investments
Term established by SFF to describe investments with a clear intention to improve the social/environmental/economic situation in developing and emerging markets while targeting market or above-market returns. [Source: Swiss Sustainable Finance]

Divestment
The sale of an asset for social or political goals. Examples of divestment include the selling of South African assets during the apartheid era or, more recently, investments in fossil fuel-related assets. In many regions, local legislation drives divestment guidelines, which can influence the extent to which public funds can or cannot invest in certain regions. Divestment is also sometimes known as divestiture. [Source: Schroders]

Double Bottom Line
A term used to describe the combination of quantitative + qualitative analysis embraced by socially conscious investors. The qualitative analysis overlay generally differentiates responsible investing from its conventional roots and competitors. [Source: First Affirmative Financial Network]

Dual-class Shares
A company with dual-class shares has more than one class of common stock. In general, each class has equal economic interest in the company but unequal voting rights. Dual-class stock thus tends to weaken the influence of public shareholders and are considered an effective antitakeover defense. [Source: Stanford: Corporate Governance Research Initiative]

Duty of Candor
A fiduciary duty, it requires that management and the board inform shareholders of all information that is important to their evaluation of the company and its management. [Source: Stanford: Corporate Governance Research Initiative]

Duty of Care
A fiduciary duty, it requires that a director make decisions with due deliberation. [Source: Stanford: Corporate Governance Research Initiative]

Duty of Loyalty
A fiduciary duty, it addresses conflicts of interest. For example, if management is considering a transaction with a company in which a director has a significant financial interest, the duty of loyalty requires that the terms of the transaction promote the interests of the shareholders over those of the director. [ Source: Stanford: Corporate Governance Research Initiative]

Sources:

  1. Allianz Global Investors, ESG Glossary, Retrieved: September 12,2020
  2. First Affirmative Financial Network, Glossary of Responsible Investing Terms, Retrieved: September 12,2020
  3. Global Affairs Associates, ESG Glossary, Retrieved: September 12,2020
  4. Invesco Ltd., Glossary: Understanding ESG jargon, Retrieved: September 12,2020
  5. Nuveen, LLC., Glossary: Responsible investing, Retrieved: September 12,2020
  6. Schroders Investment Management North America Inc., Understanding sustainable investment and ESG investment terms, Retrieved: September 12,2020
  7. Stanford Graduate School of Business, Corporate Governance Research Initiative, Retrieved: September 12,2020
  8. Swiss Sustainable Finance, Glossary, Retrieved: September 12,2020

Disclaimer: This glossary is NOT intended to be an authoritative reference document. All information in this glossary is for educational use only. This glossary has been compiled based on public domain information available on the websites of the mentioned sources. While due care has been taken in compiling this glossary, ESGSense does not assume any liability for any inaccuracy or factual error. Any term or definition mentioned here does NOT constitute financial or investment advice. ESGSense assumes no liability for any financial decisions and/or investments made on the basis of information gained from this glossary.