What Is Sustainable Investing?
Sometimes referred to as ethical, socially conscious, or socially responsible investing, sustainable investing looks at mixing the social consciousness with the financial advantages of an investment. In other words, it looks at how to support ideal practices in the world with an investment vehicle.
The causes that may be supported can widely vary as you might expect. You might look towards human rights or environmental causes. Conversely, you may avoid any businesses involved in gambling or weapons.
Investors thus look to the potentially good social and environmental impacts of the investment. It’s interesting to consider how any investment will likely have some kind of impact – for better or worse – that is often ignored. Sustainable investing looks at how these effects can be anticipated and approached to maximize the benefits of the investment.
As you might expect, sustainable investing is certainly not a well-defined investment strategy that is easily explained with tangible steps. It is a wide-ranging strategy with plenty of room for thinking outside the box.
It is advisable to start small as you don’t want to get involved in high risk investments right off the bat. You may wish to consider investments that are socially responsible and then contribute more as your knowledge and comfort level improves.
One example of sustainable investing is found in community avenues. It is low risk and you will receive a nice rate of return. On the “sustainable” side of the sustainable investing phrase, you could play a role in the community by supporting small businesses and home ownership in your community. Hopefully your contribution can give you a return and make a positive long-term difference as well.
According to experts, higher-risk sustainable investments could be in things like clean technology or water. If you can handle the risk, you might be able to see a higher rate of return and be a part of the social benefits as well.
Sustainable investing is not a fad but a frame of mind. It is literally putting your money where your mouth is. If this is something that interests you, try to align your investment goals with issues that are significant to you. You may be able to have a hand in supporting such social ventures in your community or across the world.
So, what do you think about sustainable investing? Is it something that you are going to try?