Sustainable investing trends are growing in popularity around the world. High-net-worth investors are now seeking to maximize financial returns while ensuring a positive impact on society. For instance, sustainable investments can help create a cleaner environment and reduce greenhouse gas emissions. They can also help build a healthier, safer and more inclusive society. The key to sustainable investing is that it can help investors do well while doing good.
However, ESG investing is still a relatively young industry, and there are a lot of stakeholders to consider. The process of becoming more sustainable requires due diligence and appropriate mitigation of ESG risks. Millennials are especially interested in investing in causes that reflect their values. As such, it is important to understand how to cater to this generation and invest in sustainable companies.
Those interested in sustainability can look to ESG reports for investment recommendations. While these reports may not be mandatory, they are increasingly being used by institutional investors. ESG data will allow investors to determine the impact of a company on the environment and on the economy. The Securities and Exchange Commission is also taking action to help investors understand the broader context of ESG investments.
Growing media coverage and investor demand have helped drive the growth of sustainable investment strategies. These trends have led to the proliferation of new products from mainstream and specialist asset management firms.