Society is becoming very aware of the positive impact it could be made on our planet investing in more sustainable companies. Matching principles and return have become an easy task with multiple sustainable choices. Whatever matters to you most, it is perfectly possible to invest with a conscience and make a profit at the same time.
Sustainable investment is a rising trend. What exactly are managers evaluating when applying the ESG lens on a company?
- Environmental – research into a company’s impact on the earth, in both positive and negative ways, including climate change policy, green products and tech, usage of renewable energies such as solar and wind
- Social – consists of people-related elements like company culture and issues that impact employees, customers, consumers, and suppliers – both within the company and in greater society
- Governance – how corporate managements and boards relate to different stakeholders, how the business is run, and whether the corporate incentives align with the business’s success
The following link takes you to a short video where Tom Stevenson, Fidelity Investment Director, explains what is ESG and the main reasons why interest in ESG investing is growing. He says that “companies that take ESG seriously are actually the better companies”. Watch the video following this link What is ESG?
And remember the value of units can fall as well as rise, and you may not get back all of your original investment.