In active investing, the investor actively selects the stocks in which to invest. This selective approach is called "stock picking". The goal of this approach is to beat the market and earn an excess return. To be fair, it does involve increased risk and many investors fail to beat the market. The opposite of active investing is passive investing.

When investors take on active ownership, they want to be actively involved in the company in which they invest. This involvement can take the form of investors actively exercising their voting rights at the company's annual general meetings. This active interest is also often used to advocate for a sustainable transformation process of companies.

Best-in-class is a filtering process in which the most sustainable companies in an industry are filtered out according to ESG rating. The problem here, however, is that this also results in companies being included in financial products that operate in a non-sustainable industry. In our opinion, even the most sustainable defense company according to ESG rating is not sustainable because it does not achieve a positive impact in the core of its business activities.

A chart is the visual presentation of the price development of a company listed on the stock exchange.

The carbon footprint indicates the sum of emissions caused by a company. Even you as a private person have a carbon footprint, which you can calculate on some websites. For companies, these emissions can be divided into Scope 1, 2 & 3.

If interest received is always reinvested, there is a compound interest effect. This effect has an enormous impact, especially when investing for the long term.

Corporate Social Responsibility describes the responsibility a company has to act in a way that does not harm the environment or society.

The principle behind the Cost-Average-Effect is quite simple. If you invest continuously through a savings plan, your purchase price of a share will balance you out. At high prices you will buy less shares, at low prices you will get more company shares for your invested money.

See Sustainability Report.

A securities account is the place where your securities are collected. You can have a securities account with your shares and ETFs at your bank or broker.

Diversification refers to what is known as "not putting all your eggs in one nest". In order to minimize the risk in the portfolio, an attempt is made to divide the invested capital among several investments. This can happen within the same asset classes, for example, by diversifying into several stocks, or across several asset classes (e.g. stocks, bonds, real estate, etc.).

Divestment is the systematic withdrawal of investments. This can mean that investors withdraw their capital from companies due to social and political controversies. Reasons for this can be the industry in which a company operates, scandals or the political system in which the company is located.

As a shareholder of a company, you also participate in the company's profits. In addition to the performance, there is also a profit-related payment to investors - the dividend. Whether a dividend is paid and the amount is determined at the annual general meeting.

Doughnut economics is a theory from economics that assumes planetary and social boundaries. According to this theory, a secure and just way of life for humanity is only possible in the area between these two boundaries, which then look like a doughnut. The founder of the theory and the movement behind it is the British economist Kate Raworth.

The letters 'ESG' stand for 'E' Environment, 'S' Social and 'G' Governance. These factors are intended to encourage companies to also consider non-financial aspects in their orientation.

ESG investing is when ESG factors are included in the investment decision. This inclusion can be done by various methods, such as screening.

With the EU Taxonomy, the European Union is attempting to create a framework that classifies economic activities according to their sustainability. However, the taxonomy is also viewed critically by some experts. Especially the inclusion of nuclear and gas is discussed very controversially.

Exchange Traded Funds (ETFs for short) are index funds that are listed on the stock exchange. The aim of an ETF is to track a specific index, such as the DAX, as closely as possible. Therefore, the price of an ETF moves very close to that of the index. ETFs are a way to invest passively and achieve a large diversification of an asset class with relatively little money.

Greenwashing is when a company or organization presents itself as environmentally friendly without any basis in fact, thus misleading others. Companies use it to fool consumers in order to appeal to their desire to do something good for the environment. This is despite the fact that these companies spend more time and money marketing themselves as environmentally friendly than they do minimizing their true environmental impact. For more, read our blog article on the 7 sins of greenwashing.

Growth stocks are defined as growth-oriented companies that have high growth prospects, but are often not yet covered by fundamental values such as stable sales, etc.

Impact investing is the term used to describe an investment strategy in which, in addition to a purely financial return, measurable positive effects for the environment or society are to be intentionally achieved. However, it is important that the positive impact is measurable and intentional.

An index is a calculated average for the joint performance of several shares. Examples are the DAX in Germany or the ATX in Austria.

The investment horizon is the period for which the invested money should remain in the value investment. In terms of the compound interest effect, a long investment horizon is worthwhile on the one hand to benefit from exponential growth and on the other hand to compensate for possible price fluctuations over time.

ISIN is the abbreviation for "International Security Identification Number". The ISIN helps to clearly allocate securities such as shares.

In simple terms, liquidity indicates how easily an investment (e.g. a share) can be bought and sold without having to conduct lengthy negotiations and without significantly influencing the price. The higher the demand for a share, the more liquid the market, so that investors can easily buy and sell their shares.

Long-term investing is all about staying power. Instead of investing according to short-term cycles, the aim is to build up a basis over many years and thus secure oneself financially in old age, for example. Depending on the investment horizon, short-term fluctuations on the stock market are ignored and long-term growth rates are relied upon.

The market cap indicates the market value of a stock corporation. Market capitalization is also often referred to as stock market value. It is calculated as the sum of all outstanding company shares traded on the stock exchange.

There are different ways of including sustainability in the investment decision and selecting according to it. Screening is often used for financial products, for example with positive screening and negative screening. In negative screening, companies are excluded from the investment universe due to poor ESG scores or sustainability criteria.

P/E ratio stands for price/earnings ratio. This is a profitability ratio that can be used for one's own analysis of a share. This value can be used to check with which factor of the annual profit the price of a share is valued. The P/E ratio is calculated as follows: P/E = price of the share / earnings per share).

Instead of picking individual stocks as in active investing (stock picking), passive investing relies on the general growth of the market. Here you invest mostly in passive investments like ETFs.

Our earth has ecological stress limits that must not be exceeded without endangering the basis of human life. These planetary boundaries exist on various dimensions, such as water use or CO2 emissions. A well-known model in which the planetary boundaries are applied is Doughnut Economics, which was developed by the British economist Kate Raworth.

The portfolio is the entire portfolio of shares and other investment objects owned by the company.

There are different ways of including sustainability in the investment decision and selecting according to it. Screening is often used for financial products, for example with negative screening and positive screening. Unlike negative screening, positive screening includes companies in the investment universe because of their positive impact on the environment or society.

The Principles for Responsible Investment (PRI) are principles developed and supported by the United Nations (UN). Signatories undertake to include ESG factors in their investment decisions. However, signing the principles is voluntary.

In the classic sense, rating agencies are private-sector companies that assess the creditworthiness of companies or sovereigns. However, there are also rating agencies that specialize in the field of sustainability. Unfortunately, the data collected is usually not available to the public and is sold to institutional investors. We want to change that with money:care and make our collected data available here.

The return is the yield or profit of your investments. It is expressed as a percentage. For example, if the value of my share has risen from €100 to €120, I have made a 20% return.
The return is expressed as a percentage and is the annualized return on an investment.

With a savings plan, you can save for a specific investment product such as shares or ETFs with regular payments. Advantages that arise from this are usually the low minimum investment amount and the participation in the cost-average effect.

Screening is an investment approach in which possible companies are excluded from an investment on the basis of previously clearly defined criteria. Examples of screening here are positive screening and negative screening.

These different scopes are a categorization for the delimitation of CO2 emissions.
Scope 1: In the first category, direct emissions from the company's own sources or sources controlled by the company itself (company headquarters, vehicles, etc.) are determined.
Scope 2: In the second category, indirect CO2 emissions from the energy used by the company are aggregated.
Scope 3: Here, all other emissions are collected that are related to the company. However, these emissions are usually outside the direct control of the company. An example of this would be emissions generated by suppliers or by the use of the company's products. Nevertheless, these emissions should be considered, reported and actively contributed to by companies in order to reduce them.

A share is equivalent to a certificate that entitles the holder to shares in a company. With the acquisition of a share, the investor thus becomes a shareholder in the company, which goes hand in hand with a right of co-determination and a share in the profits.

When investors seek to actively participate in order to influence the direction of the company, this is shareholder activism. Often, this form of influence takes place publicly and can be equated with active ownership.

Sin stocks are shares in listed companies whose business activities are directly or indirectly connected with ethically and morally reprehensible areas of business. These include tobacco, alcohol and pornography.

Socially responsible investing (SRI) involves investing in companies that are considered socially responsible because of the way they do business. Socially responsible investing can be practiced through individual stocks with good social criteria or through a socially responsible investment fund or ETF.

A stock exchange is a trading place where supply and demand meet for the purchase and sale of securities.

A sustainability report (or CSR report) is a published report in which a company provides information about its efforts and performance in the area of sustainability. This report is published on the website of the respective company. For our impact measurement at money:care, the sustainability report serves as a good basis for our data.

Sustainable investing refers to an investment approach in which not only the return is decisive for the investment decision, but also sustainability factors are included. This practice is mostly based on ESG factors.

The Sustainable Development Goals (SDGs for short) are the United Nations' sustainability goals. These 17 goals were adopted by the members of the United Nations in 2015 and their implementation is scheduled for 2030. The SDGs address social challenges such as education, climate change and gender equality.

The Total Expense Ratio (TER) is also often referred to as the total cost ratio. It is a percentage figure that indicates the costs incurred by an investment fund or ETF per year.

A transformation process is a process of change. Away from an actual state, towards a target state. In the area of sustainability, many companies must change in order to continue to be forward-looking. Therefore, forward-looking companies subject themselves to a sustainable transformation process. In the process, individual processes are examined, right through to the entire business model.

The "United Nations Research Institute for Sustainable Development" (short: USRISD) was founded in 1963 and is an independent research institute of the United Nations, which conducts research on social issues of current development processes. We at money:care are glad to have UNRISD as a partner and our impact model of indicators (Sustainable Development Performance Indicators).

Volatility refers, among other things, to the fluctuation in the prices of securities within a certain period of time. A security is called volatile if the corresponding price fluctuates relatively strongly within a short period of time.