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Sustainable investing, also known as socially responsible investing (SRI) or Environmental, Social, and Governance (ESG) investing, is becoming increasingly popular among investors. This trend involves investing in companies that prioritise social and environmental sustainability, as well as good governance practices. In this article, we will explore the rise of sustainable investing and why it’s more than just about making money.
The Power of Capital to Drive Change
Investors have the power to drive change by choosing to invest in companies that prioritise sustainability. This can help shift the market towards a more sustainable future, and encourage companies to prioritise ESG practices. By investing in companies that prioritise social and environmental sustainability, investors can use their capital to make a positive impact on the world.
The Benefits of Sustainable Investing
Sustainable investing can bring benefits beyond financial returns. By investing in companies with strong ESG practices, investors can promote sustainability, reduce risk, and contribute to positive social and environmental outcomes. Moreover, companies with strong ESG practices often have better long-term financial performance and may be better positioned to weather crises.
The Growth of Sustainable Investing
The growth of sustainable investing is evident, with the amount of assets under management in sustainable funds increasing rapidly in recent years. According to Morningstar, sustainable funds in the US attracted record inflows of $20.9 billion in the first quarter of 2021, up from $10.4 billion in the same period last year.
Making Informed Decisions
Investors interested in sustainable investing should do their research and make informed decisions. This includes considering the environmental, social, and governance practices of the companies they are investing in, as well as analysing the financial performance of these companies.
Sustainable investing is a growing trend that reflects a desire among investors to invest in companies that prioritise sustainability. By investing in sustainable funds, investors can not only make a positive impact on the world, but also benefit from potential financial returns. Making informed decisions and investing in companies with strong ESG practices can help drive positive change and contribute to a more sustainable future.
