The Rise of Sustainable Investment
The subject of sustainability is an undeniably hot topic at the moment. Forward-thinking businesses and people alike are implementing strategies that will ensure the longevity of their spot in the marketplace as well as have a positive impact on the environment.
An increased awareness of impact combined with a highly competitive marketplace that is fuelled by the availability of a wide range of products means that the consumer is no longer limited and now has the opportunity to buy according to their principles and morals.
This concept is no different when it comes to investing money, and the ability to choose how to invest, and to invest sustainably, is highly feasible.
Reasons behind the rise of sustainable investment
Today more than ever, people are constantly being made aware of their footprint on the world from a sustainability perspective and the increased awareness has, in turn, led to a change in the behaviour of the consumer.
This has affected the face of investment as the increased interest in issues such as energy efficiency, renewable fuel sources, water scarcity, food production and diversity, has led to people investing in green assets and marketplaces instead of in alcohol or plastics for example.
This is evident through the portfolio that investment companies and SIPPs providers like Bestinvest, who have a diverse range of available asset classes offering including those that offer direct access to sustainable investments both at home and abroad, have on offer.
How has this affected the investment portfolio?
The change in the behaviour of consumers has had a direct impact on the financial marketplace with the lucrative nature of green assets and marketplaces being realised. Typically, accessibility and having a vested interest depicts how an investor will place their money.
Accessibility is key as investors find value in personally accessing their portfolios which gives them a better sense of control of their money.
Increased flexibility and having the ability to choose how to invest money is important as people naturally prefer to put their funds into a matter close to their own personal interests.
The opportunity to choose investments that enable the injection of funds into streams that promote growth and provide long-term benefit and sustainability for the investor, the investor’s money, and the environment, has proven to provide a sense of satisfaction and accomplishment to the investor.
ESG criteria
Environmental, Social, and Governance (ESG) criteria are often used by environmentally conscious investment companies to evaluate the sustainability operations of a company, and rank investment opportunities accordingly.
Studies have shown that integrating ESG criteria into an investment portfolio allows an investment company to better project the long-term sustainability of an investment opportunity. It also typically highlights the current operating and ethical strategies that a company practices and therefore provides an evaluation benchmark for investors to go on.
What is next for the market?
Naturally, people want to see their money grow and as with any investments, trust plays a part when investing money. The introduction of ESG criteria when investing has seen the transition from social investing into sustainable investing, and many large stream investors use the criteria as it is proving to be a successful measure.
Judging by the marketplace growth, it is certain that taking an environmentally conscious stance to all aspects of business is the ethical thing to do. Sustainable or ‘green’ investments achieved a global market value of $21 trillion at the end of 2015 and has continued to grow in the three years since.
Global statements are being made to address issues such as climate change and many countries have already set investment goals and projected increased money being invested into policies such as low-carbon emission policies and climate change policies that will have a positive impact.
About the Author Megan Firth
A lifelong interest in writing and travel combined with a desire to better understand the human experience led Megan to pursue a BA in English and Anthropology. You can find her putting words into practice on all things travel related.