ESG Investing Glossary

Fundamental analysis is a method of evaluating investments by analyzing the underlying factors that affect the value of a security, such as a stock, bond, or commodity. It involves assessing the financial health, performance, and prospects of a company or asset to determine its intrinsic value and make investment decisions based on that assessment.

A fund of funds (FoF) is an investment strategy where a fund invests in other investment funds rather than investing directly in individual securities or assets. In other words, it is a mutual fund or an investment trust that holds a portfolio of other funds rather than holding individual stocks, bonds, or other assets.

Freedom of association is a fundamental human right that is recognized internationally. It refers to the right of individuals to join and form associations, organizations, or unions of their choice without interference or coercion.

Fossil fuels are energy resources that are derived from ancient organic materials, such as plants and animals, that have undergone geological processes over millions of years. The three main types of fossil fuels are coal, oil (petroleum), and natural gas.

The Forest Stewardship Council (FSC) is an international non-profit organization that promotes responsible forest management and the certification of forest products. It was established in 1993 as a response to concerns about deforestation, habitat destruction, and unsustainable logging practices.

Foreign Direct Investment (FDI) refers to the investment made by individuals, companies, or entities from one country into another country with the aim of establishing a lasting interest and controlling ownership in a business enterprise. FDI involves a direct ownership stake in a foreign company or the establishment of new operations in the foreign country.

Forced labor, also known as forced labor or involuntary servitude, refers to a form of labor in which individuals are compelled to work against their will, under the threat of punishment or harm. It is considered a serious violation of human rights and is prohibited under international law.

Fiduciary duty is a legal and ethical obligation that requires individuals in a position of trust to act in the best interests of another party. It is a fundamental concept in various relationships, such as between trustees and beneficiaries, financial advisors and clients, directors and shareholders, and attorneys and clients.

Fiduciary refers to a legal and ethical relationship of trust and confidence between two parties, where one party (the fiduciary) is entrusted with the duty to act in the best interests of the other party (the beneficiary). The fiduciary is expected to prioritize the interests of the beneficiary above their own and exercise a high standard of care, loyalty, and good faith in managing the affairs and assets entrusted to them.

Externalities refer to the unintended consequences or impacts of an economic activity on parties that are not directly involved in the transaction. These effects can be positive or negative and occur outside the market mechanism, resulting in costs or benefits that are not fully reflected in the prices of goods or services.