Sustainable investing is an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.
Environmental practices might include improving water quality or reducing carbon emissions. Social impact could involve fair labor practices and improvements in workplace equality and diversity. Governance issues relate to a company’s leadership structures, board composition, and management incentives. As with any strategy investors should consider how these approaches might affect their overall investment plan.
Interest in sustainable investing continues to grow, and the pressure is on for investment organizations to move toward the sustainable investing model. In an era when the investment industry is challenged by rising end-client and regulatory expectations and challenging economics, the alternative of maintaining the status quo leaves the industry vulnerable to decline. The next stage of development will depend heavily on industry leadership and innovation in investment thinking and practice, as well as data management. If these are present, the future is exceptionally bright.
