Sustainable investing is becoming increasingly popular – and for a very hopeful reason to contribute to positive social change. It reflects an investor’s desire to consider a company’s environmental, social and corporate governance (ESG) factors before investing. In a time when destructive climate events are increasingly common - and some corporate actions are creating controversy for investors, employees and customers – a growing number of investors are interested in investing in companies that share their own values and that are actively improving their ESG practices and avoiding those that may be negatively affecting the planet.
As with any investment, there are potential risks and rewards to sustainable investing. Funds that are considered to be ESG-focused do more than screen for stocks based on value and growth - We have tools (Morningstar) that identify sustainability criteria such as fossil fuel exposure, from carbon net-zero to renewable energy, disclosure practices, governance practices, sustainability scores and workplace diversity.