How Sustainable Investing Is Changing People, Business & The World
Building wealth doesn't have to mean leaving your values at the door. From conscious capitalism to impact investing, you've got a lot of options for supporting your values through your investment strategies.
Broadly speaking, these options are part of a larger movement called "sustainable investing," designed to help you invest in ways that support your ethics and values.
Sustainable investing has become increasingly popular as more people look for ways to incorporate their beliefs into their wealth strategies. In 2019, $13.5 billion moved into sustainable funds—nearly three times the fund flows in 2018.1
One reason it's become so popular is that more people are recognizing that the companies solving the world's biggest challenges may be in the best positions to thrive. Often, that's because these companies are pioneering better ways of doing business.2
Beyond that, sustainable investing can also offer a greater sense of purpose. It can bring deep, personal fulfillment that may be just as valuable as financial returns.
So, if you're looking for more ways to integrate your values with your investing strategies, here's what you can do. These four approaches to sustainable investing can help align your beliefs with your financial choices.
#1 Socially Responsible Investing (SRI)
SRI takes a values-based approach. That means your values guide your investment choices. So, SRI usually involves investing in companies that align with your social, political, and/or religious values. It can also involve screening out companies or industries doing things you stand against.
#2 Environmental, Social & Governance Investing (ESG)
ESG investing involves supporting companies that are working to improve the environment or community. You are often looking to support companies working to improve their local communities or that have corporate cultures that support your values.
#3 Thematic Investing
With thematic investing, your choices and investments are driven by one or more themes derived from your beliefs or ideas about what represents progress. These themes could include anything from green energy and cybersecurity to artificial intelligence, cures for diseases, religion, or more.