Which of the following scenarios denotes the principle of sustainability in asset management?

The principle of sustainability in asset management is primarily reflected in the integration of Environmental, Social, and Governance (ESG) factors into investment analysis. This approach recognizes that a company’s long-term success is not solely dependent on financial metrics but also on its impact on the environment, social equity, and governance practices.

By integrating ESG factors, investors can assess a company's ability to manage risks and opportunities that are relevant to sustainability. This helps in identifying investments that not only provide financial returns but also contribute positively to society and the environment. The focus on long-term growth, risk management, and ethical considerations encapsulates the essence of sustainable investing, which seeks to create a balanced approach to asset management.

In contrast, maximizing short-term profits aligns more with a traditional financial focus, which may overlook the importance of sustainability. Avoiding low-performing sectors may not necessarily reflect a sustainable investment strategy, as performance can be cyclical and influenced by various factors unrelated to sustainability. Concentrating on domestic markets alone further limits investment diversity and the opportunity to support sustainable practices globally.