Investing sustainability is a key consideration for asset owners. Many financial institutions have taken steps to address environmental and social concerns through a range of strategies. These include establishing dedicated investment strategies, reducing the impact of individual investments, and incorporating socially responsible investing into the asset allocation of their fund. Investing in sustainable companies may help a fund achieve a high level of social and environmental impact.
In addition to ESG criteria, financial advisers can also consider the financial performance of an organization and personal goals to help you decide which investments to make. These advisers may be slightly more expensive, but they can provide tailored investment strategies and professional investment management to meet your goals. As awareness of the importance of investing sustainability grows, it is likely to become a mainstream concept. As demand for sustainable investments grows, so will pressure on organizations to improve their ESG scores.
Sustainable investing has spawned new financial products in response to societal concerns. Green bonds and ESG-specialized exchange-traded funds (ETFs) are two examples. This growing interest in sustainable investing has even spurred regulators to pay close attention to these products. However, critics of the new trend still argue that ESG has negative consequences.
While most investors’ primary goal is financial return, sustainability is a valuable side effect that should be considered. Investors are required by law to consider the materiality of sustainability impacts in their investments. Sustainability impacts have a wide range of implications ranging from climate change to social justice. They are essential to investing responsibly and making informed decisions.