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Responsible Investment Basics

The term socially responsible investments (SRI) is often used interchangeably with other terms such as;

  • Sustainable investments, 
  • Ethical investments, 
  • Impact investing, 
  • Environmental, Social, and Governance (ESG) investing.

SRI is an investment that is considered socially responsible because of the nature of the business the company conducts.

Common themes for socially responsible investments include:

 Avoiding companies involved in:

  • Alcohol
  • Gambling
  • Tobacco
  • Fur and specialty leather 
  • Weapons
  • Pesticides
  • Animal testing
  • Palm oil

      Seeking out companies engaged in: 

  • Social justice 
  • Environmental sustainability 
  • Alternative energy
  • Clean technology

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 to do not end up in 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 that does not consider environmental, social and governance (ESG) practices as part of their investments strategy you might be enabling the growth of industries and companies that might go against your values. 

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.

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. 

 

Be part of the change and join a wave of investors who are growing their wealth and shaping the world for the better.

 

 

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. 

Environmental

  • Climate Change
  • Greenhouse gas (GHG) emissions
  • Resource depletion, including water
  • Waste and pollution
  • Deforestation

Social

  • Working conditions, including slavery and child labour
  • Local communities, including indigenous communities
  • Conflict regions
  • Health and safety
  • Employee relations and diversity

Governance

  • Executive pay
  • Bribery and corruption
  • Political lobbying and donations
  • Board diversity and structure
  • Tax strategy

The United Nations Sustainable Development Goals (UN SDGs) 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 ís 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.

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.

 

2014

2016

Europe

58.80%

52.60%

United States

17.90%

21.60%

Canada

31.30%

37.80%

Australia

16.60%

50.60%

Asia (ex Japan)

0%

3.40%

Japan

0%

3.40%

Total

30.2%

26.30%

Source: Global Sustainable Investment Alliance.

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. Do your research on the products that you buy and sell, as well as say 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. At the end pure nature is the ultimate luxury.

Learn – Stay on top of the trends, be forward looking, research and understand issues is key to identifying problems and discovering solutions.

Create awareness – Creating awareness is critical 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.

There are great opportunities to apply modern technology and advancements in science to help correct social and environmental issues, as well as lead more conscious and sustainable lifestyles. 

Startups, social enterprises and technology companies are emerging worldwide with concepts and ideas to tackle environmental, social and governance challenges.

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The purpose of this site is to serve as a daily news source and learning point for ESG, SRI and Impact investment trends and to promote awareness of environmental, social and governance issues and opportunities. 

The information provided by this site is not a recommendation to invest or purchase products. This site does not take into account your particular investment objectives, financial situation or investment needs, all of which should be considered prior to making an investment decision. We encourage seeking professional financial advice before making any investment decision.

 By Responsible-Investors ©