You are here:

What Is Sustainable Investing?

What is sustainable investing?

Guest Post

For the longest time, the primary motivator behind investments individuals and companies made is the potential return. If people with money to spend see something intriguing, something promising, something that could be big sooner rather than later, then they will not hesitate to put down the money needed to get involved.

Obviously, businesses and individuals are well within their rights to seek the highest returns for their investments, but these days, money cannot be the lone motivation for your move. Your money must have a purpose. It must be a catalyst for positive change and a driver for a good cause.

If you are now seeking to realize more than just profits with your money, then perhaps it is time you look closely into the practice of sustainable investing.

Defining Sustainable Investing

Sustainable investing goes by many names.

Some people have taken to calling it “socially responsible investing,” while others have gone with “values-based investing.” The Forum for Sustainable and Responsible Investment lists other, more specific terminologies that aim to capture the essence of the concept such as “community investing,” “green investing,” and “ethical investing.”

You can choose the terminology you prefer, but I personally like to go with sustainable investing because it conveys the idea pretty clearly.

The aim with sustainable investing is to put your money into something that will bring about lasting, positive changes to the environment, society, and corporate governance. Those are also known as ESG factors.

Turning a profit is still a goal with sustainable investing, but it’s far from being the only concern.

Why You Should Consider a Sustainable Investment

Very few people are ever put in a position to affect real and lasting changes in the world. Money provides people with such an opportunity, but there’s only so much of it to go around, and many are hesitant to spend it on anything they perceive as risky.

The beauty of a sustainable investment is that it has the potential to reward you handsomely for taking a risk.

If you see a community banding together to improve the lives of each of its members, wouldn’t it be so rewarding to know that your investment in them contributed to their success being a reality? If you see a startup pushing forward a piece of promising green technology, don’t you want your name attached to something that could change the way people live for the better?

Furthermore, by chasing after sustainable investments, you are also veering away from those that see no issue with continuing to inflict harm upon the environment or communities for the sole purpose of making money.

We need to become more conscientious with the way we spend our money if we want this world to be better, and sustainable investments afford with us that opportunity.

Sustainable Investing Is Trending Up

If you are still unsure about the benefits of pursuing a sustainable investment, then consider how much growth potential ESG assets possess.

According to OppenheimerFunds, $8.1 trillion of the $40.3 trillion professionally managed assets in the U.S. in 2016 were part of ESG-focused strategies. That number is up from $6.2 trillion in 2014, $3.3 trillion in 2012, and $2.6 trillion in 2010.

The point here is that sustainable investing is not just a niche practice as more and more people are seeing great value in it.

Money can indeed make the world go round, but that’s not necessarily a bad thing. By putting your money into sustainable investments for instance, you can bring about significant positive changes in the world and your bottom line will not suffer for it.

November 28, 2018

Leave a reply