Why best-in-class investing matters
It can preserve sector diversification and reward relative leaders, but still owns high-impact sectors and depends heavily on score methodology.
How it is applied
Investors define peer groups, material factors, weights, minimum standards, data, controversies, and rebalance rules.
Portfolio example
A portfolio selects the highest-rated mining companies while retaining mining exposure.
How to interpret it
Best in class means relative leadership, not absolute sustainability or low investment risk.
Limitations and common misconceptions
Peer definitions, provider scores, data estimates, and rapid score changes can alter selection.
Sources and further reading
- What is Responsible Investment?Principles for Responsible Investment