Your investment decisions can have an impact over the world.
It is common practice to save for retirement and to invest to get returns and grow wealth. However, it is also very important that the investments that you select and contribute to do not end up in places or companies that pollute and damage the environment, have poor working conditions for employees or are involved in bribery and corruption.
In several countries it is common for retirement savings to be directed towards a fund.
If you are making ongoing contributions towards a fund or have investments in funds that do not consider environmental, social and governance (ESG) practices as part of their investment strategy you might be enabling the growth of industries and companies that might go against your values and the environment.
Only 26% of all professionally managed assets globally amounting to $23 trillion in assets under management are managed under responsible investment strategies according to the Global Sustainable Investments Alliance.
The other 74% of professionally managed assets globally could be fueling industries like fracking, coal, plastic production, weapons, tobacco, forest logging, gambling, toxic waste, abusing human rights and exploiting employees.
When making and selecting investments make sure that you assess their environmental, social and governance (ESG) approach and that it aligns with your personal interests and goals.
Ensuring that we channel investments away of companies and products that pollute the environment is key to address global problems like:
- Global Warming and
- Plastic waste
This is also essential to achieve the United Nations Sustainable Development Goals.
What is ESG and what does it consider?
Environmental, social and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.
- Climate Change
- Greenhouse gas (GHG) emissions
- Resource depletion, including water
- Waste and pollution
- Working conditions, including slavery and child labour
- Local communities, including indigenous communities
- Conflict regions
- Health and safety
- Employee relations and diversity
- Executive pay
- Bribery and corruption
- Political lobbying and donations
- Board diversity and structure
- Tax strategy
The Sustainable Development Goals are the blueprint to achieve a better and more sustainable future for all.
They address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice.
The Goals interconnect and in order to leave no one behind, it is important that we achieve each Goal and target by 2030.
The UN Sustainable Development Goals are:
1. No Poverty
2. Zero Hunger
3. Good Health and Well-being
4. Quality Education
5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy
8. Decent Work and Economic Growth
9. Industry, Innovation and Infrastructure
10. Reduced Inequality
11. Sustainable Cities and Communities
12. Responsible Consumption and Production
13. Climate Action
14. Life Below Water
15. Life on Land
16. Peace and Justice Strong Institutions
17. Partnerships to achieve the Goals
The good news is that globally the responsible investment industry has been gaining momentum and growing considerably. Yet great opportunities remain as there is still great scope to gain market share.
As already mentioned only 26% of all professionally managed assets globally amounting to $23 trillion in assets under management are managed under responsible investment strategies according to the Global Sustainable Investments Alliance.
Proportion of responsible investment assets to total professionally-managed assets.
Investment Decisions – When exploring investments make sure you assess their Environmental, Social and Governance (ESG) approach and that it aligns with your personal interests and goals.
Consumer choices – Your choices as a consumer dictate what companies produce. Doing research on the products that you buy and sell and saying no to items that harm the environment, have poor working conditions or are involved in corruption is a major step forward and a very strong message to the world.
Lifestyle practices – Preserve water, don’t waste food and resources and keep the environment clean. Avoiding products that affect the environment is critical. Pure nature is the ultimate luxury.
Learning – Staying on top of the trends, being forward looking, researching and understanding issues is key to identifying problems and discovering solutions.
Creating awareness – Creating awareness is essential to generate cultural change and fostering collective thinking and cooperation. Sharing articles, contributing insights and educating others can go a long way.
Creative projects – Startups and technology companies are emerging worldwide with concepts and ideas to tackle environmental, social and governance challenges.
Startups, social enterprises and technology companies are emerging worldwide with concepts and ideas to tackle environmental, social and governance challenges.
14/02/2019 by Carlos Mauleon
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