Sustainable investing — also known as impact investing or triple-bottom-line investing — is gaining a lot of attention these days. But can sustainability and investing go hand in hand? More specifically, can someone interested in sustainable investing also be interested in making a return on their investment?
Sustainability and Investing
Protecting the environment while also making money — that’s the challenge with any kind of impact investing. These investments often involve putting one thing at risk in exchange for another.
For example, you could sacrifice potential short-term profits by not buying a heavily polluting company. Or you could give up some quick cash by choosing an investment or company with positive social or environmental impacts.
Read on to learn more about sustainability and investing and if it’s right for you as an investor.
What Is Sustainable Investing?
Sustainable investing is any investment strategy that is designed to produce financial results that last over the long term while also addressing environmental, social, and governance (ESG) issues.
Sustainable investing is part of a larger concept called impact investing, which is using money to create social and environmental good as part of your investing strategy.
Impact investors differ from philanthropists and others who donate their money to good causes. Impact investors seek to make money in addition to improving society.
Why Does Sustainability Matter When Investing?
The world is changing quickly and in many ways for the better. There are new industries, technologies, ways of doing business, and ways of thinking about the world.
Climate change, clean energy, and sustainability issues are increasingly important to businesses, governments, and investors. This means that sustainable investing has the potential to be profitable while addressing important societal issues.
Is Sustainable Investing Only for Good Causes?
Many people think that sustainable investing is only for causes. The reality is that sustainable investing can be done for many different reasons. For example, you can invest in sustainable companies to help them grow. Or you can invest in sustainable companies to make a profit from them.
Sustainable investing is about more than just protecting the environment. It’s also about making money and finding new areas for investment. It’s about finding new industries, new technologies, and new ways of doing business that is good for both investors and the world as a whole.
How to Find Investments That Are Good for Society
As an investor, you may want to find good investments for society. But how do you know which ones they are? The best way to find good investments for society is through research and due diligence.
Investigate the industry that your investment is in. What are its products? Who uses them? What are the trends in the industry? What does the future of the industry look like? Once you know the industry, you can better understand your investment. Know the company and its products
You also need to know the company itself. What does it do? How does it make money? What are its short-term and long-term goals? How does the company make money? Where does it operate? How does it treat its employees? What is the company’s reputation?
The Bottom Line
Ultimately, investing can be a powerful way to help society thrive. It can help make the world more sustainable and better for future generations.
Sustainable investing brings together investing in environmental protection and social change. It’s an investment strategy that has the potential to be profitable while addressing important issues.
