Prescreening Questions to Ask Sustainable Investment Manager

What experience do you have in integrating ESG (Environmental, Social, Governance) criteria into investment decisions?

Start by gauging the candidate's hands-on experience with ESG criteria. You're searching for detailed examples of how they've directly integrated these factors into their investment decisions. This question helps you understand their familiarity with the complexities of ESG investing.

Can you describe a time when you successfully influenced a company's sustainable practices through your investment role?

Real-world success stories can be quite revealing. Ask for specific instances where the candidate's investment actions led to tangible improvements in a company's sustainability practices. This showcases their effectiveness in driving positive change.

How do you stay current with evolving sustainability regulations and standards?

The field of sustainability is always evolving. It's critical that your candidate stays up-to-date with the latest regulations and standards. This question will reveal their commitment to continuous learning and professional development.

What methodologies do you use to evaluate the sustainability of an investment portfolio?

Dive into the candidate's technical expertise. Various methodologies can be used to assess sustainability, from ESG scoring systems to impact assessments. This question helps you understand the tools and techniques they prefer and are proficient in.

How do you balance financial returns with sustainable impact in your investment strategies?

Balancing profitability with sustainability isn't easy. This question aims to uncover the candidate's strategy for ensuring that investments also yield desirable financial returns while fulfilling sustainability criteria. It's a balancing act that requires savvy decision-making.

What tools or frameworks do you use to assess the environmental impact of potential investments?

There are numerous tools and frameworks available for assessing environmental impact. Whether it's the GHG Protocol or a proprietary tool, understanding their preferred resources can provide insights into their analytical approach.

Can you provide an example of a sustainable investment that underperformed financially and how you managed the situation?

Every investment doesn't always hit the mark. This question is aimed at understanding how they handle setbacks, learn from them, and potentially turn things around. Adverse situations often spotlight a professional's true capabilities.

How do you engage with companies to improve their sustainability performance post-investment?

Active engagement with invested companies is crucial for sustained impact. Candidates should present strategies and actions they've taken to help companies improve their sustainability performance after the initial investment.

What role does shareholder advocacy play in your sustainable investment strategy?

Shareholder advocacy can be a powerful tool in driving ESG goals. Does the candidate actively use their shareholder position to influence corporate behavior and policies? This response can reveal their commitment level to active and responsible investing.

How do you measure the social impact of your investments?

Measuring social impact can be quite subjective. Ask the candidate about their preferred metrics and methodologies for evaluating the social aspects of their investments. This can reveal their thoroughness and attention to intangible outcomes.

Describe your experience with carbon footprint analysis and reporting.

Climate change is a cornerstone of ESG criteria. Look for candidates with experience in carbon footprint analysis and reporting. These skills are critical for assessing the true environmental impact of investments.

What is your approach to managing the risks associated with climate change in your investment portfolio?

Climate risk is a growing concern. How does the candidate identify and manage these risks within the portfolio? Their answer should reflect a strategic approach to climate-related challenges.

How do you incorporate diversity, equity, and inclusion criteria into your investment decisions?

Diversity, equity, and inclusion are key social components of ESG. Understanding how the candidate incorporates these into their decision-making can reveal their dedication to holistic sustainability.

What are some of the key sustainability metrics you prioritize when evaluating a company's performance?

Sustainability metrics can vary broadly. Ask about the specific metrics they prioritize, whether it's water usage, carbon emissions, or social impact indicators. This helps reveal what they value most in sustainable investing.

Can you explain your strategy for investing in renewable energy projects?

Renewable energy is a hotbed of investment opportunities. Ask the candidate to elaborate on their strategies for evaluating and investing in such projects. This response can highlight their expertise and innovation within this niche.

How do you handle conflicts between achieving short-term financial goals and long-term sustainability objectives?

Balancing short-term and long-term goals is a frequent dilemma. Understand their strategy for balancing immediate financial results with the pursuit of long-term sustainability objectives, revealing their strategic flexibility.

What experience do you have in reporting on sustainability performance to stakeholders?

Transparent reporting is key to maintaining stakeholder trust. Look for experiences that highlight their ability to communicate complex sustainability performance clearly and effectively to various stakeholders.

How do you ensure that your investment practices align with the Sustainable Development Goals (SDGs)?

The SDGs provide a universal framework for sustainability. Ask how they ensure their investment strategies and practices align with these global goals, which can highlight their commitment to broader societal impact.

What criteria do you consider when divesting from companies that do not meet your sustainability standards?

Sometimes divestment is necessary. Ask about the criteria they use to determine when to divest from companies failing to meet sustainability standards. This can provide insight into their non-negotiables.

How do you assess the governance practices of companies you're considering for investment?

Governance is the third pillar in ESG. Inquire about their approach to evaluating governance practices, from board diversity to compliance and ethics. This response sheds light on their comprehensive assessment skills.