The Importance of Sustainable Investing
Mohammed Shaheen
25-02-2022
Making wise investments is an effective way of supplementing your income and expanding your economic practices beyond the more of maintaining a savings bank account. However, investments also require a great deal of critical thinking and social responsibility.
In the twenty-first century, there are a plethora of investment opportunities for those looking to diversify their portfolios and grow their revenues. However, how many of the companies you invest in actually hold true to their environmental, social, and governance (ESG) policy?
What is sustainable investing?
As the name suggests, sustainable investing involves investing in assets and organizations that power greener, environmentally-friendly ways of transacting business, paving the way for a more sustainable future. Essentially, greening business practices will reduce pollution, shift the focus to employing renewable sources of energy, and curtail other hazardous industrial activities.
This is extremely vital, especially in the face of climate change threatening the future of the planet. As public concerns intensify, especially among the youth population, more and more people are gravitating towards green investment practices.
How to make sustainable investments
As a potential investor, it is very important to invest your money in ventures that align well with your values and beliefs. This is key given the unethical practice of “greenwashing” wherein companies push their agenda under green branding for the purpose of gaining investors.
According to a report by BlackRock, adopting sustainable investment methods has helped to develop businesses without any indication of a downward plunge. In other words, sustainable investing is not only pro-environment but also profitable.
Most notably, Hollywood actor Leonardo DiCaprio has been spearheading the practice of green investing alongside his tireless activism for environmental conservation.
When looking to make green investments, experts suggest finding a company that genuinely adheres to its ESG policy by focusing on environmental issues that need rectifying. Trading in stocks is a great way to supplement your wealth. But you can also invest in companies that gear their efforts towards decarbonization and reducing pollution while also looking at renewable sources of energy.
Although sustainable investments are good for the planet, they also carry a certain amount of fiscal risk. So when in doubt, consult a financial advisor.
