Sustainable investing is making waves as more and more investors become open to the concept. For those who are yet to adopt the principle of sustainable investing in the UK, it pays knowing what it is all about and what difference it makes in terms of your investments.
First things first—what is sustainable investing?
Sustainable investing is a manner of investing for expected returns, while holding on to your values and causes, be it driving social change, maintaining the way your company, country, or organization conducts itself, or any other advocacy you may be standing for. There are three ways to do this, namely, through exclusion, integration, and impact. Exclusion means to exclude industries and companies that don’t reflect the same values as you do from your portfolio. Integration means to integrate social, environmental, and corporate governance factors in order to reduce risk and improve returns. Impact investing means investing with intention in order to generate measurable social and environmental impact, alongside sustainable financial return.
If you are curious about sustainable investing in the UK, here are more facts you should know to adapt its principles:
1. Sustainable investing is synonymous to responsible investing. It is essentially shifting towards more positive approaches to investing and away from old models where you simply avoid certain stocks. Nowadays, investors are more interested in focusing on investments that actively provide solutions to sustainability issues and challenges rather than areas that they simply don’t like.
2. Sustainable investing doesn’t have to equate lower profits. Being socially and environmentally responsible don’t have to result in low performance. As a matter of fact, when done right, sustainable investing in the UK can outperform markets.
3. Sustainable investing doesn’t necessitate huge capital. As a matter of fact, crowdfunding of socially responsible ventures make it possible for investors with less cash but a bug heart to succeed in sustainable investing.
Sustainable investing is slowly but surely making it to mainstream, especially with new platforms opening up greater opportunities for investors to discover and adapt its principles.
About the Author:
Agronomics (LSE: ANIC), the AIM-listed investment company, remains the only UK based vehicle that provides the public with an opportunity to engage in a sector which is likely to become the future of our food. August saw Agronomics participate in BlueNalu’s latest fundraising round following the announcement of their First-of-its-Kind Commercialisation Strategy. When Jim Mellon and Anthony Chow return from attending the Good Food Conference, I am sure the September buzz for this hot sector will continue.
