If you follow business & investing news, you know that sustainable investing & ESG have been dominating headlines all year.
From January through July, American investors poured a record $20.9 billion into sustainable mutual funds & ETFs. And globally there’s over $34 trillion invested using sustainable criteria … $12 trillion in the US … and counting.
So what’s driving this growth? On September 23, the Schroeders Global Investor Survey 2020 revealed something pretty exciting: Americans aren’t JUST investing to drive societal and environmental change. They’re also shifting purely for higher returns.
This news is fantastic because investors can see the link between social and environmental practices and a company’s financial performance.
Investors rate environmental impact and social impact as “very important”
Naturally, sustainable investors focus heavily on climate change: In the study, they rate a company’s environmental impact as “very important” for positive returns. What’s incredible: they now consider many SOCIAL practices as “very important:”
- Impact on communities & society
- Treatment of employees
- The gender pay gap
- Diversity and inclusion
For investors, the COVID pandemic and our deep struggles for racial justice and equality have shone a light on the link between corporate leaders and laggards and their financial performance.
That’s great news for all of us, because every dollar invested in a good corporate citizen is a dollar deprived from a company that … well, isn’t.
So whether investors are motivated to drive change on the issues they care about … or purely by higher returns … this massive shift in where capital goes benefits all of us.
When we invest sustainably, we invest in a better future.
And I think we can all agree that’s something we all want!
Want to learn more about sustainable investing? Check out our “What is Sustainable Investing” article, or you can set up a quick call with us to learn more!
