Sustainability and finance are closely linked and play a crucial role in shaping a climate-neutral future.

Eurosif (The European Sustainable Investment Forum) is the leading pan-European association for the promotion of sustainable finance and has published a new methodology for classifying sustainable investments in Europe. The methodology provides a structured approach to market research at European level for the classification and assessment of financial products. It comprises four categories of sustainability-related investments:

1. Simple ESG investments: Integration of ESG factors to assess risks and opportunities without explicit performance measurement.

2. Advanced ESG investments: Systematic analysis and measurement of ESG performance to promote sustainable investment opportunities.

3. Impact-oriented investments: Focus on positive social or environmental impact, supported by reference frameworks such as the EU Taxonomy.

4. Impact-generating investments: Actively bringing about positive social and environmental change through targeted screening and investment in companies that enhance positive impacts or mitigate negative impacts, including measuring impact performance.

The new methodology aims to increase the transparency and traceability of sustainable investments for investors, regulators and society and emphasizes the need for a systematic data collection approach for future market studies.