What is sustainable investing?

Sustainability is now more important to individuals than ever before (us included), and this shift in priorities has led to changes in how financial decisions are made.

For example, it’s now common to leave money to charity in a will, with the aim of leaving a positive legacy behind. We’re also seeing quite an increase in sustainable investments.

But what does that even mean? Terry Hewes, Director and Chartered Financial Planner, has outlined what it means to invest sustainably and if it’s something you should consider.

How can you invest sustainably?

There are several investment approaches that can be considered sustainable, as long as they lead to positive social, ethical or environmental outcomes, and a good financial return.

Some examples include:

• Investing in companies that act ethically and sustainably
• Investing in environmental projects, such as renewable energy infrastructure
• Putting money into cooperatives and social enterprises
• Supporting recycling initiatives
• Investing in businesses that seek to innovate or act on issues such as climate change and global inequality

Terry’s take on this approach…

The question on a lot of people’s minds is whether or not you will earn the same return as if you hadn’t considered these factors, but that could be said for any type of investment – there is never any guarantee. The reality of investing is that there is fluctuation in all industries.

However, it could be argued that they are in fact more resilient than other methods, as environmental, social and government matters often influence share prices, potentially leading to better returns.

Simply put, this approach to investing can be attractive to many as it has both positive returns and beneficial environment and/or societal outcomes. As sustainability becomes more of a focus amongst consumers and business, this method is set to gain momentum over time.

There is, as always, a lack of guarantee, so we would always recommend getting in touch with a professional adviser before making any big decisions. If you’d like to re-evaluate your portfolio to include sustainable options, or you’re just starting your investment journey, get in touch with us here.