Glossary

De-jargoned: Glossary of ESG terms

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There are currently 5 relevant ESG terms in this directory beginning with the letter F.
Fiduciary Duty
In broad terms, fiduciary duty refers to the duty of the board of directors to act in the interest of the corporation. In the institutional investment context, trustees of pension funds owe fiduciary duties to beneficiaries to exercise reasonable care, skill and caution in pursuing an overall investment strategy suitable to the purpose of the trust and to act prudently and for a proper purpose. The explicit legal nature of fiduciary duty varies depending on the country of origin. While most institutional investment funds strive to create financial benefits for their beneficiaries, it is also possible for trust deeds explicitly to require trustees to consider ESG factors in investments. Against the backdrop that there is increasing evidence supporting the materiality of ESG issues, some legal experts conclude that it is part of the fiduciary duty of a trustee to consider such opportunities and risks in investment processes. [Source: Swiss Sustainable Finance]

Financial Centres For Sustainability
The Financial Centres for Sustainability (FC4S) Network is a partnership between financial centres and the United Nations Environment Programme, with the objective to exchange experience and take common action on shared priorities to accelerate the expansion of green and sustainable finance. The long-term vision of the FC4S Network is rapid global growth of green and sustainable finance across the world’s financial centres, supported by strengthened international connectivity, and a framework for common approaches. [Source: Swiss Sustainable Finance]

FPIC - Free, prior and informed consent
Named by The Forest Peoples Programme, this names the value that a community has the right to voice an opinion on projects taking place on the lands they own and should be included in the conversation of use. [Source: First Affirmative Financial Network]

Freshfields Report
Freshfields is an international law firm based in London. The original report, A Legal Framework for the Integration of Environmental, Social and Governance Issues into Institutional Investment (2005), provided assurance to institutional investors that the consideration of ESG issues is firmly grounded within the bounds of fiduciary duty. This landmark report was followed by Fiduciary Responsibility—Legal and Practical Aspects of Integrating Environmental, Social and Governance Issues into Institutional Investment (2009). The report provides a legal roadmap for fiduciaries looking for concrete steps to operationalize their commitment to responsible investment. [Source: First Affirmative Financial Network]

Friendly Acquisition
A situation in which a target company is open to receiving a takeover offer from an acquiring firm. The opposite of a friendly acquisition is a “hostile takeover.” [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.