What is Sustainable Investing?
A mainstream investment style that has the power to transform the world in which we live.
While the history of socially responsible investing can be traced back hundreds of years, the impact of it has been most substantial during the last several decades. As an investment discipline, it has been distinguished by values based screening that eliminated categories of stocks such as those of companies that produce alcohol, tobacco, or weapons. This form of socially responsible investing helped to incubate the more powerful version that exists today.
Socially responsible investing is being replaced by sustainable investing.
Sustainable investing focuses on investments in companies that meet positive environmental, social and governance (ESG) criteria.
It is a progressive approach to investments based on the conviction that great companies can serve the bottom line as well as environmental and public concerns, internalize the full cost of their products and services, and embody principles of good corporate governance.
The philosophy of sustainable investing holds that companies that are leaders in ESG are likely to represent smart investment choices since these criteria allow us to identify well-managed, forward thinking and innovative companies.
The following link to the 2007 Moskowitz Prize winning study offers information suggesting that these forward thinking companies not only have happy employees, but they also have very strong stock performance.
The depth and breadth of sustainable investment tools and resources available now enable investment advisors such as Global Vision Advisors to apply our traditional investment processes to the exciting and expanding universe of sustainable investments.
Read more about emerging trends in sustainable investing –
Access the article “From Socially Responsible Investing to Sustainable Investing” by Joe Keefe (Green Money Journal, May/June 2007 issue).
Many studies have demonstrated that it is now possible to achieve consistent profitable returns while making a difference in the world.
Research indicates that there are compelling positive links between ESG performance and financial performance. Many of these companies that form the core of sustainable investment portfolios have had significant outperformance of their stock prices
For example, the Domini 400 Social Index, a sustainable investment portfolio, has demonstrated better returns over the past 17 years when compared to the S&P 500 index.
To learn more about this growing body of research and to view the results of numerous studies that have been conducted on socially responsible and sustainable investing, click here.
Socially responsible investing under any name has changed dynamically during the last decade.
It is now a proactive and positive discipline that is pulling innovative and vibrant companies to it. It is no longer a fringe movement for special interests, but rather a mainstream investment style that has the power to transform the world in which we live.
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