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What is Sustainable Investing?
There have been several new trends in the investment world over the last few years, but one has stuck out as being one that has grabbed the attention of investors across the United States.
Sustainable investing has become a focus of individuals and corporations as the environment and climate have continued to take up more real estate amongst the public conscience. In short, sustainable investments take into consideration environmental, social, and governance criteria to not only produce gains for the investor, but also produce positive changes for society at large.
The good news for fans of sustainable investing is that it has continued to grow throughout the last several years. In fact, numerous sources of data point towards 1 in every 3 dollars that are currently being managed by professional financial brokers is being invested according to sustainable investment strategies.
Why Practice Sustainable Investing?
There really is no one reason why someone may wish to practice sustainable investment strategies. It could be that sustainable investors seek lucrative financial returns that also contribute to improvements in the social, environmental, and governmental realms. These investors may be in constant search of investments that can help achieve both of these goals in tandem. In that sense, sustainable investing yields positive results for not only the investor, but for their community, their state, and their country.
For others, some may have a deep personal connection with the environment and with producing meaningful change around them. When coupled with a desire to invest their money in the future and in solutions for some of the problems that they deem as needing solving, sustainable investments make perfect sense.
With climate change and many other social issues having been identified as needing funding and attention over the last several years and even several months, sustainable investments continue to gain popularity with the help of concerned individuals and corporations who are looking to use capital to produce positive financial outcomes in tandem with actual change in the world.
Who Can Practice Sustainable Investing?
You can, of course, design a portfolio on your own or with the help of a professional that utilizes sustainable investment strategies. But a valid question to ask is who, other than yourself, is also practicing sustainable investing.
The entities that practice sustainable investing are numerous. Venture capitalists may practice sustainable investing by creating and funding companies that look to solve some type of social or environmental problem while also giving mind to producing jobs and opportunities for all types of people. Hospitals may practice sustainable investing by choosing to not supply money towards companies that are known to or are connected to products and practices that do no good to public health. Various foundations who inject money into their communities to help achieve their goals and produce good for those around them are also practicing sustainable investing.
There are countless examples that can be given to answer the question posed earlier. The truth is that any business or individual who is funding any type of public project, research, or venture through the use of investment capital to enact positive changes is a practice of sustainable investing.
What to Expect from a Sustainable Investment Fund?
One of the attractive aspects about sustainable investing is that it spans numerous industries and businesses and several different investment types. Sustainable investing involves not only stocks, but alternative investments, real estate, and a multitude of other commodities that are all proven to produce competitive rates of return.
It is a common misconception that sustainable investments cost more. Many believe that in order to invest in things that are aligned with one’s morals and values, it must burn a bit larger of a hole in the pocket. Fortunately, this is not true and there are numerous studies that have dispelled that line of thinking.
In fact, studies have shown that sustainable investments often produce similar gains to traditional investments and are actual less likely to experience the same level of risk as traditional funds.
Easier Than You Think
Any time a new investment strategy is brought up, it’s easy to think that it’s too good to be true or that it would be difficult to alter your current portfolio. But if sustainable investing is something that you would like to start doing, it’s quite easy to get into.
If you work with a certified professional financial planner, having a serious discussion about the merits of sustainable investing is a great way to start the conversation about altering your current investment profile to better suit your values and your desires. The days of investing in things to simply make money are behind us, and the reality is that investing in companies and ideas that provide the types of benefits we want to see.
If you are ready to see results that speak to your financial goals while also checking all of your ESG boxes, it’s time to strategize and begin taking a long and hard look at sustainable investments.