Sustainable Investments - Investing in the future
With climate change consistently dominating the news agenda, people are increasingly connecting such issues to where they invest their money. Although ethical and sustainable investing have been available for several decades, it has more recently gained greater momentum, becoming a mainstream issue.
The focus on sustainable investing has only been furthered by the COP26 Climate Conference held in Glasgow at the beginning of the month. Nevertheless, there remains a level of confusion surrounding what sustainable investments entail and the impact that they can have.
So, what is sustainable investing?
It’s a strategy and practice to incorporate environmental, social and governance (ESG) factors into investment decisions. Such portfolios have therefore been screened and evaluated to ensure that they meet certain ESG criteria.
The movement is being embraced by asset managers and investment companies, helping to ensure that issues of sustainability are being incorporated into their business models and investment decisions. For example, some have chosen to exclude certain categories such as weapons and tobacco while others have chosen to invest in areas that cause reduced environmental harm such as opting for green energy rather than fossil fuels. Investment managers are therefore increasingly taking into consideration these key factors when managing pensions and investments to ensure they are well positioned for the future green economy.
To find out more about sustainable investments please speak to your Financial Planner.
Brian Mellor Financial Services is authorised and regulated by the Financial Conduct Authority.