Sustainable investing, also known as socially responsible investing, refers to the practice of incorporating environmental, social, and governance (ESG) criteria into investment decisions. There are several reasons why an individual investor might want to focus on sustainable investing.
Positive social and environmental impacts
Sustainable investing can have positive impacts on society and the environment. By investing in companies that are committed to sustainability, investors can help to drive positive change and support the development of more sustainable business practices. This can help to address a wide range of social and environmental issues, from climate change and pollution to social inequality and human rights abuses.
Alignment with values
Sustainable investing can be a good choice for investors who want their investments to align with their values and beliefs. By considering ESG criteria in investment decisions, investors can create portfolios that reflect their values and contribute to a more sustainable future.
Investing in or choosing not to invest in a given company can impact how their stock price and cost of capital. This can real impacts on their ability to hire, management compenstation and other factors that will drive their business. The more people that invest with sustainablity in mind, the larger potential impact it can have on companies.
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