Why is Sustainable Investment so important?

Sustainable investment is important because it can help contribute to a better world. Investments can be made where capital works in a way that positively influences society so that we can work towards a more sustainable future.

Governments and companies need to make drastic changes in the way they operate in order to deal with huge challenges when it comes to climate change and also social and economic perspectives. Investors have the power to influence how companies do this and this can be in a sustainable way.

People no longer select investments based solely on the financial returns they will generate. They want sustainable solutions that reflect their values, that make a contribution to things they consider important and that do no harm. The range of products on offer to invest in are also expanding, giving investors more choice.

The long-term approach to sustainable investing

Investors may need to invest in the long-term ensuring a brighter future for us all. Collaborations or initiatives to tackle problems such as child labour and living wages will need a more long-term investment strategy as these issues can’t be solved over night. The influence that investors can bring collectively can help turn the tide and gradually bring about fundamental change.

At Resolve Financial Solutions, we look at investment strategies that consider not only good financial returns but also seeks positive change in a social or environmental manner. A sustainable investing strategy looks at what a company does as well as its Environmental and Social Governance (ESG) practices and overall investment decision-making process. While this approach is not new, its definition and objectives have evolved over the years.

Historically Asset managers would avoid companies who are invested in so-called “sin stocks,” such as tobacco, firearms, alcohol, and casinos. Now they look more holistically, based on ESG factors and EU Sustainability goals. These include areas such as environmental impact (energy performance, waste, recycling, etc), social issues (positive gender equality, work-life balance, etc) and governance quality (conflict resolution and independent auditing, etc).

Why should you consider sustainable investing? 

One reason to consider an ESG investment strategy is to align your principles with your investments.

Secondly to support companies that focus on ESG factors.

According to Fidelity Investments, focusing on ESG can often ‘signal operational efficiency and lower costs, reduced environmental liability, opportunities for low-carbon revenue sources, effective management of human capital, reduced risks related to product/service safety, opportunities for an expanded customer base, financial and operational decisions that best serve shareholders, reduced risk from reputational damage or weak financial controls, and well-managed operations and costs in the face of regulatory changes’.

So, if you are interested in investing based on your principles, you should talk to us about our sustainable investing strategy.

*Your capital is at risk. The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

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