Investing in your future is one of the most important things you can do to set yourself up for success. While there are many, many different ways to invest (stocks, bonds, mutual funds …oh my!), these days, there is also a way to do so responsibly. ESG investing is one such way to do so.
The United Nations’ Principles for Responsible Investment defines the concept of responsible investing as “an approach to investing that aims to incorporate ESG factors into investment decisions, to better manage risk and generate sustainable, long-term returns.” What does this really mean? This means that there are companies who consider ESG factors (outlined below) when compiling their investment portfolios:
Environmental Factors
- Pollution
- Energy efficiency
- Climate change
- The use of natural resources
- Fracking
Social Factors
- Labor conditions
- Product quality and safety
- Human Rights advocacy
- Employee relations
Governance Factors
- Diversity in the Workplace
- Transparency
- Board policies and business ethics
- Executive pay
Are you passionate about these causes too? If so, you’re in luck. By investing in ESG funds, you can elect to invest in companies that specifically support these initiatives and are committed to doing so. There are a variety of ESG funds to invest in, but one thing is certain: the companies included in these funds have been diligently analyzed and scrutinized to ensure that they not only align with these ESG principles, but are actively working to improve standards of conducting business to benefit the greater community. ESG investing offers investors like you the ability to invest with a conscience. You can invest in your future, while simultaneously making an investment in improving the world around us.
For more information on the United Nations Principles for Responsible Investment, please visit: https://www.unpri.org/
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