Sustainable investing involves thinking about both the financial returns AND the social and environmental impact of investment decisions.
While there are subtle differences between each provider, the overall aim of sustainable investment funds is to deliver competitive returns, better value for money and contribute positively to important issues such as climate change.
Here are three themes driving sustainable investment returns:
Profitability
Many companies that demonstrate better environmental, social and governance (ESG) outcomes have outperformed those that don’t. The lesson here – be smart with your shareholders money, act responsibly, avoid controversy and profits should improve.
Risk
The recent global pandemic and resulting interruptions have shown that navigating uncertainty is more important now than it ever has been. Companies that manage sustainable risk better tend to show lower downside risks and fewer bankruptcies.
Supply and demand
There is a new wave of investors looking for sustainable investment opportunities. This inflow of investor money will continue to drive demand for shares, bonds and other securities issued by ESG-minded companies. Demand is one of many aspects that can drive value – the more demand there is, the higher prices may go.
Let’s talk about sustainable investing
Our advisers can help you find the sustainable investment fund that’s right for you. We only recommend funds that have been thoroughly researched by expert third parties, including BlackRock, the largest index investment manager in the world.
To talk to an AdviceFirst adviser call 0800 438 238 or email letstalk@advicefirst.co.nz.
Or click here to request a call from one of our team.
