Why Sustainable Investing matters
As we continue to see a rise in the range of global sustainability challenges and complex risks, investors are beginning to re-evaluate traditional portfolio approaches.
Sustainable investing, often times also referred to as socially responsible investing, is the process of incorporating environmental, social and governance (ESG) factors into investment decisions. As the term ‘ESG’ suggests, its scope go well beyond environmental concerns alone. It also includes the following:
• Environmental: Climate risks, clean energy, addressing resource scarcity
• Social: Diversity, human rights, and cybersecurity
• Governance: Business ethics, transparency, and anti-corruption
Individuals that typically invest in companies, organizations and funds with the purpose of generating measurable social and environmental impact alongside a financial return fall in the bracket of sustainable investing. What this kind of investment typically results in is a widespread impact across various sectors, from renewable energy and climate change, to health, safety and community development.
In the last decade, demand for sustainable investments is being driven, in part, by millennials who prefer to invest based on values and personal priorities. Based on a report published by EY Global, millennials are poised to receive more than US$ 30 trillion of inheritable wealth, and as a result, sustainable investments will continue to grow in demand. To put this into perspective, this investment strategy has grown 107.4% annually since 2012 and currently accounts for 18% of the assets under management (AUM) in the wealth and asset management industry.
What has made this investment strategy all the more attractive, especially in recent years, is fund managers have been able to develop “best -in-class” investment approaches that are geared towards outperforming other investment classes by not only generating attractive returns by also assessing Environmental, Social and Governance (ESG) impact.
Providing sustainable investing opportunities enables firms to not only capture financial returns for clients, but also to realize intrinsic returns not replicated elsewhere. Companies such as Distributed Energy for example offer managed portfolio services in renewable energy investment opportunities across India, East Africa and the Middle East. Companies like this and alike are able to not only provide attractive returns to investors but are also able to provide a lasting impact on both people and the planet.
Soon, sustainable investing will simply be considered “investing”. Sustainability is a global force that will continue to factor into everyday decisions and have an impact in a myriad of industries. As sustainable investing goes mainstream, it won’t simply be a niche in a broader strategy but instead will be naturally integrated throughout a portfolio.
Sustainable investing, often times also referred to as socially responsible investing, is the process of incorporating environmental, social and governance (ESG) factors into investment decisions. As the term ‘ESG’ suggests, its scope go well beyond environmental concerns alone. It also includes the following:
• Environmental: Climate risks, clean energy, addressing resource scarcity
• Social: Diversity, human rights, and cybersecurity
• Governance: Business ethics, transparency, and anti-corruption
Individuals that typically invest in companies, organizations and funds with the purpose of generating measurable social and environmental impact alongside a financial return fall in the bracket of sustainable investing. What this kind of investment typically results in is a widespread impact across various sectors, from renewable energy and climate change, to health, safety and community development.
In the last decade, demand for sustainable investments is being driven, in part, by millennials who prefer to invest based on values and personal priorities. Based on a report published by EY Global, millennials are poised to receive more than US$ 30 trillion of inheritable wealth, and as a result, sustainable investments will continue to grow in demand. To put this into perspective, this investment strategy has grown 107.4% annually since 2012 and currently accounts for 18% of the assets under management (AUM) in the wealth and asset management industry.What has made this investment strategy all the more attractive, especially in recent years, is fund managers have been able to develop “best -in-class” investment approaches that are geared towards outperforming other investment classes by not only generating attractive returns by also assessing Environmental, Social and Governance (ESG) impact.
Providing sustainable investing opportunities enables firms to not only capture financial returns for clients, but also to realize intrinsic returns not replicated elsewhere. Companies such as Distributed Energy for example offer managed portfolio services in renewable energy investment opportunities across India, East Africa and the Middle East. Companies like this and alike are able to not only provide attractive returns to investors but are also able to provide a lasting impact on both people and the planet.
Soon, sustainable investing will simply be considered “investing”. Sustainability is a global force that will continue to factor into everyday decisions and have an impact in a myriad of industries. As sustainable investing goes mainstream, it won’t simply be a niche in a broader strategy but instead will be naturally integrated throughout a portfolio.
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