Negative screening in investing excludes companies based on specific ESG criteria.Group of answer choicesTrueFalse

The correct answer is True.

Negative screening in investing is a strategy that involves excluding certain companies or sectors from a portfolio based on specific Environmental, Social, and Governance (ESG) criteria. This investment approach aims to align an investor's portfolio with their ethical values by avoiding businesses that do not meet predetermined ESG standards. For example, an investor might choose to exclude companies involved in tobacco production, fossil fuels, or those with poor labor practices. This method is part of socially responsible investing (SRI), where investors seek to foster positive societal impact while still considering financial returns. Negative screening helps to ensure that the investments held are consistent with the investor's values and beliefs regarding sustainability and ethical practices.