KEY TERMS GLOSSARY

Environmental Impact: Factors that relate to a company’s interaction with the physical environment.

ESG Investing:

Investing which prioritizes optimal environmental, social and governance (ESG) factors or outcomes. ESG investing is widely seen as a way of investing “sustainably”—where investments are made with consideration of the environment and human wellbeing, as well as the economy. It is based upon the growing assumption that the financial performance of organizations is increasingly affected by environmental and social factors.

ETF (Exchange Traded Fund):

A collection of stocks and bonds (or other securities) pooled into a single fund.

Governance: The internal system of practices, controls, and procedures a company adopts in order to govern itself, make effective decisions, comply with the law and meet the needs of external stakeholders.

Investing: The process of buying assets that increase in value over time. Investing can be about spending time or money to improve your own life or the lives of others. In finance, investing involves putting your money towards companies, real estate or other securities in hopes of reselling later at a high price.

Mutual Fund:

A professionally managed fund that pools lots of investors’ money in order to buy a basket of investments.

Social Factors: Factors that relate to how companies manage their relationships with employees, suppliers, customers, and the communities where they operate. Social relates to the relationships a company has and the reputation it fosters with people and institutions in the communities where it does business. Every company operates within a broad, diverse society.

Stocks: Shares (pieces) of ownership in a company.

Stock Market:

The collection of physical and electronic markets where buyers and sellers can trade shares.

Stakeholder:

An individual or group that has an interest in a company, organization, or business.

Sustainability

The ability to maintain or support a process continuously over time. Sustainability seeks to prevent the depletion of natural or physical resources, so that they will remain available for the long term.

Sustainability-Linked Bond

Also known as KPI-linked bonds (where KPIs are key performance indicators related to sustainability). Unlike traditional sustainable bonds, which have to prove that the capital they raise will be allocated to specific sustainable projects, sustainability-linked bonds qualify as sustainable because they are issued with a structural component (for example, a coupon) that varies depending on whether or not a defined environmental, social and/or governance (ESG) objective is achieved.

Ticker

A symbol by which stocks are identified.

Use of Proceeds Bond

A bond that specifies its proceeds will be used to have a positive environmental or social impact. Common types include green bonds, social bonds and sustainability bonds.