Ethical and sustainable investments, also known as socially responsible investments (SRI) or sustainability-led investments (ESG), are becoming increasingly popular among investors who seek not only financial results but also a positive impact on society and the environment. Here are the main aspects of their definition and benefits:
Basic Principles of Ethical and Sustainable Investing
Ethical standards and norms: Investors choose companies and funds that align with their values and ethical beliefs. This may include avoiding investments in tobacco, weapons or other counter-version industries.
Social Responsibility (S): Investments take into account social aspects such as public welfare, equality, human rights and the improvement of public life.
Environmental Sustainability (E): Focus on environmental protection and sustainable use of resources. Investments support companies that strive to reduce carbon emissions, utilize renewable energy and comply with environmental standards.
Corporate Governance (G): Assesses how well companies manage their affairs, including transparency, board independence, compensation practices and long-term planning.
Benefits of ethical and sustainable investments
Consistency with values: Investors can feel confident that their money is being used in accordance with their ethical beliefs and principles.
Reputational risk mitigation: Investing in companies with good corporate social responsibility can help avoid reputational risks associated with counter-versionary practices or events.
Financial performance: Research shows that companies with high ESG standards can be more long-term successful through better governance, a better risk profile and access to new markets and opportunities.
Stimulating change: Investing in companies that actively pursue sustainability can stimulate change in industry and society at large by directing resources towards more responsible practices.
Key tools for ethical and sustainable investments
ESG-sensitive investment funds: Funds that specialize in investing in companies with high ESG standards.
Social Responsibility Bonds (SRI bonds): Bonds whose proceeds are used for social or environmental purposes.
Voting at shareholder meetings: Investors can use their votes at shareholder meetings to support proposals that meet ESG criteria.
Ethical and sustainable investments offer investors the opportunity to not only achieve financial goals, but also contribute to sustainable development and social justice. Choosing the right investment vehicles depends on your values, financial goals and comfort level with risk.