Sustainable Investing Trends

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Investing in sustainable companies can be a rewarding way to help the planet, while still maintaining a positive financial return. The growing demand for sustainable investments has fueled an explosion in new sustainable investment products from mainstream asset management companies and specialist companies. Investing in sustainable companies has become increasingly popular with investors, and the trend is expected to continue for years to come.

Investors can choose from a variety of sustainable investing trends, including mutual funds, ETFs, and retirement plan options. There are also specialized impact investment strategies for high-net-worth individuals. Sustainable investments often involve “negative screening,” or excluding companies that do not align with investor values. In the past, this has included sin stocks, but has since expanded to include investments in human rights, gender equity, clean energy, and environmental initiatives.

As global carbon emissions continue to increase, investors should diversify their portfolios away from heavy emitting industries. The risks to these industries include new government regulations, changing resource landscape, and fading consumer interest. In addition, many investors are asking companies to provide financial ESG data, allowing investors to evaluate their exposure to the climate crisis and global warming.

Investors will also be more likely to demand more than just long-term climate commitments. They will require credible, achievable and credible near-term signposts of progress toward decarbonization. They will also need to be more proactive in addressing physical climate risks, adaptation, and resiliency. Ultimately, these expectations will increase the accountability of corporations and governments.

Investing in sustainable companies can increase your financial returns, while also contributing to positive social change. Sustainable companies can reduce greenhouse gas emissions, provide a safer and healthier environment, and contribute to a more inclusive society. Furthermore, these companies strive to do well by doing good, which is the ultimate goal of investing.

A recent survey by the Global Impact Investing Network (GIIN) estimates that the global impact investment market is valued at more than US$500 billion. This number has doubled since last year, and this growth is expected to continue. While impact investing was once considered a niche market, it is now being embraced by mainstream asset managers and private banks.

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