Did you know that $35.3 trillion—or one-third of all global assets—are now invested sustainably?
Sustainable investing is an investment approach that considers environmental, social and governance (ESG) criteria in addition to traditional financial factors. Environmental criteria might include factors like a company’s carbon footprint, resource use and energy efficiency. Social factors assess how a company handles its relationships with people, and governance factors examine the behaviour of the company’s leadership.
Sustainable investing means putting your money to work in companies and projects that prioritize people, the planet, and profit—all at once. It’s not about charity; it’s about smart capitalism.
Investment professionals consider many factors that can influence the financial performance or global impact of an asset when making their decisions. Sustainable investing describes an approach to considering the long-term viability of an investment where environmental, social and governance (‘ESG’) factors are considered alongside the financial metrics in investment decisions. This might either consider how ESG factors influence the f inancial performance of the investment or seeking to achieve specific environmental or social goals by making the investment. Sustainable investing approaches can differ significantly depending on the f inancial institution and regulation in a specific country.
Think of it as a win-win: Your investments generate returns and tackle global challenges like inequality, deforestation, and carbon emissions.
The numbers don’t lie:
Global sustainable investments surged by 55% between 2016 and 2020, hitting $35.3 trillion (Global Sustainable Investment Alliance).
90% of millennials prioritize ESG (Environmental, Social, Governance) factors when investing (Morgan Stanley).
Companies with strong ESG practices outperformed peers by 4.7% annually from 2014–2018 (MSCI).
This isn’t just tree-hugging idealism—it’s a seismic shift in how the world does business. Governments are mandating net-zero pledges, corporations are racing to decarbonize, and even Wall Street giants like BlackRock are dumping coal stocks. Why? Because sustainability equals resilience.
Sustainable investing rests on two frameworks:
Environmental: Does the company protect the planet?
Example: Microsoft’s pledge to be carbon-negative by 2030 could save 16 million metric tons of emissions—equivalent to taking 3.5 million cars off the road.
Social: How does it treat people?
Brands like Patagonia (fair labor practices) set the bar.
Governance: Is leadership ethical and transparent?
Companies with diverse boards generate 43% higher profits (McKinsey).
Forget “profit at all costs.” Sustainable investing balances three pillars:
People: Fair wages, diversity, and community impact.
Planet: Reducing carbon footprints, preserving ecosystems.
Profit: ESG-focused companies often outperform. During the 2020 market crash, ESG funds saw 20% lower losses than traditional peers (Morningstar).
Lower Risk: Companies ignoring ESG face lawsuits, boycotts, and regulatory fines (e.g., Exxon’s $20 billion write-down in 2020).
Higher Returns: Clean energy stocks soared 122% in 2020, dwarfing the S&P 500’s 16% gain (BloombergNEF).
Consumer Demand: 66% of global consumers will pay more for sustainable brands (Nielsen).
Screen Your Portfolio: Use tools like ESG ratings (e.g., MSCI, Sustainalytics) to filter out fossil fuels or unethical practices.
Thematic Funds: Invest in ETFs targeting clean energy (e.g., ICLN) or gender equality (e.g., SHE).
Engage: Vote on shareholder resolutions to push companies toward sustainability.
Sustainable investing isn’t a niche—it’s the new mainstream. With $50 trillion expected to flow into ESG funds by 2025 (Bloomberg), the question isn’t “Why go sustainable?” but “Can you afford not to?”
Whether you’re a millennial activist or a retiree hedging against climate risk, your money can be a force for good. So why settle for old-school investing when you can profit and protect the planet?
How we support :
Navigating ESG complexities can be daunting—but you don’t have to do it alone. At SBC Limited, a leading sustainability and ESG consulting firm, we partner with investors and fund managers to turn principles into actionable strategies. Here’s how we help:
ESG Integration: Align your portfolio with global standards like the UN SDGs or EU Taxonomy.
Risk Mitigation: Identify and address ESG risks that could impact financial performance.
Impact Reporting: Craft transparent, credible reports to showcase your sustainability achievements to stakeholders.
Regulatory Compliance: Stay ahead of evolving ESG regulations (e.g., SFDR, TCFD) to avoid penalties and build trust.
Get in touch with us today for a consultative session at info@sbclimited.org
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