Sustainable Investing

Reviewed by Apoorva | Updated on Aug 27, 2020

Introduction

Sustainable investing directs investment capital to companies that seek to combat climate change, environmental destruction, while promoting corporate responsibility. Further, sustainability, in itself, focuses on meeting the needs of the present without compromising the needs of future generations. The concept of sustainability includes three pillars: economic, environmental, and social, also known informally as profits, planet, and people.

Understanding Sustainable Investing

Sustainable investing directs investment capital to companies that seek to combat climate change, environmental destruction, while promoting corporate responsibility. Further, sustainability, in itself, focuses on meeting the needs of the present without compromising the needs of future generations. The concept of sustainability includes three pillars: economic, environmental, and social, also known informally as profits, planet, and people.

Factors to consider before you invest

Demand for sustainable investments is being driven, in part, by millennials who prefer to invest in alignment with personal values. Since millennials are poised to receive inheritable wealth, sustainable investments will continue to grow in demand. As a result, fund managers are increasingly allocating resources to develop products and capture this emerging client segment.

As awareness has grown in recent years over global warming and climate change, sustainable investing has trended toward companies that positively impact the environment by reducing emissions or investing in sustainable or clean energy sources. Consequently, such investments does not suit industries such as coal mining due to the negative environmental impact of their business practices."