Why ESG Investing Can Help The Environment

The environment is a key topic being discussed in the news today and that is because many are worried about what the future holds. In July 2022, the UK recorded temperatures past 40 degrees for the first time as a direct result of climate change. We are all beginning to experience the very real consequences such as plastic pollution in our oceans, rising sea levels and deforestation.

We are sure that many of you are already doing your bit for the environment such as recycling your waste and walking or cycling to work instead of taking the car. There are other ways you can help and that is using your money to fight climate change as well.

Environmental, Social and Governance (ESG) investing is growing in popularity as a way for investors to help fight climate change using their wealth. ESG investing seeks to align your investments with the moral beliefs you hold.

  • Environmental – this criterion looks at how a business’s practices affect the environment. For example, it may consider their carbon emissions or energy efficiency rating.
  • Social – this criterion considers the business’s relationship with the communities it operates in. This can cover issues such as worker’s rights and customer satisfaction.
  • Governance – this criterion looks at how the business is managed and the standards to which it is run. It may focus on issues such as pay of CEOs or fair election of board members.

Taking ESG principles into account when investing your money can make a real positive change in the world. For example, you could avoid investing in funds that go against your core values or you could actively contribute to funds taking positive action. Sustainable investments can help to give you greater peace of mind to know that you are doing your part to help the environment.

ESG and sustainable investing can prove more effective than making lifestyle changes. Changing your investment strategy can be a great way to help save the environment.

A 2020 study by Make My Money Matter, published by PensionsAge, claimed that moving your pension into a sustainable fund can be up to 27 times more effective at cutting carbon than giving up flying or becoming vegan.

For many, ESG and sustainable investing is the very definition of “putting your money where your mouth is” when it comes to living a more sustainable life.

The war in Ukraine has highlighted our need for energy security. The Russian invasion of Ukraine has highlighted the risk of being reliant on non-domestic supply chains. This has prompted many governments across Europe to invest more money in renewable energy sources such as wind and tidal power. Not only will this strengthen the UK’s energy security, it will also help reduce the nation’s carbon emissions, slowing down climate change.

ESG and sustainable investing can really make a positive change in the world and at the same time grow your wealth.

If you have any questions around ESG and sustainable investing then please get in touch by emailing info@resolvefs.co.uk or calling 01932 943028 to speak to one of our financial advisers.

Please note: The value of your investment can go down as well as up and you may not get back the full amount you invested.

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