Answer: Negative screening.

## Explanation **Negative screening** is the correct answer because: 1. **Definition of Negative Screening**: Negative screening involves excluding specific sectors, companies, or practices from a portfolio based on ESG criteria. This approach avoids investments in industries or companies that are considered harmful or unethical. 2. **Divestment from Fossil Fuels**: Divesting from fossil fuels specifically means excluding companies involved in the extraction, production, or distribution of fossil fuels (coal, oil, natural gas) from the investment universe. This is a classic example of negative screening where an investor chooses not to invest in certain sectors due to environmental concerns. 3. **Comparison with Other Options**: - **ESG Integration (Option A)**: This involves systematically including ESG factors in financial analysis and investment decisions, but doesn't necessarily mean excluding entire sectors. It's about incorporating ESG risks and opportunities into valuation models. - **Impact Investing (Option B)**: This focuses on generating measurable positive social or environmental impact alongside financial returns, often through active investment in solutions-oriented companies rather than simply excluding harmful ones. 4. **Key Distinction**: Negative screening is about what you **don't invest in** (exclusionary approach), while impact investing is about what you **do invest in** (inclusionary approach). ESG integration is about how you **analyze** investments. **Conclusion**: Divesting from fossil fuels aligns perfectly with negative screening as it involves excluding an entire sector from the portfolio based on environmental concerns.

Author: LeetQuiz .