Sustainability has always been important topic in all areas of society – and it is becoming increasingly important. Because it has long been clear that our actions today will shape the future of tomorrow. So it’s no wonder that sustainability is becoming increasingly important in the area of stock market trading and financial investments. But how exactly can sustainability and investment be reconciled?
What exactly does impact investing mean?
“Impact investing” is a well-established term for impact-oriented investing in the English-speaking world. In addition to the economically-oriented investment goals of return, security and availability , ethical aspects and sustainability also play a decisive role in impact -oriented investments . The social responsibility to emphasize, in the English language in addition to impact investment and the acronym is SRI ( S ocially R esponsible I nvestment) use.
How can sustainability be defined in investments?
ESG stands for ” E nvironment – S ocial – G overnance” and refers to the three areas of environmental, social and corporate governance.
Sustainability can encompass both ecological and social aspects. In the case of companies, there is also how corporate goals are pursued and implemented in practice. The acronym ESG has established itself internationally for these 3 sustainability criteria.
Many rating and research agencies as well as financial service providers and investors, for example the members of the UN Initiative for Responsible Investment (UN PRI), work in the financial sector to assess sustainable securities using the ESG criteria. Since the areas of environment, social affairs and corporate governance are very general, the United Nations Sustainable Development Goals, or SDGs for short, often serve as a guide in addition to the ESG criteria.
How do sustainable investments work?
Sustainable investments aim to exclude controversial industries and companies that do not meet the ESG criteria or international standards from investments. The investments should flow into impact-oriented industries, companies and organizations that act in an environmentally and socially responsible manner and that ensure good working conditions and fair wages for employees and suppliers.
Examples of impact and value-driven investments:
- Sustainability fund
- Ethics fund
- Eco and environmental funds
- Other themed funds that not only meet economic factors but also ethical, social and ecological criteria
Good to know: There is still no clear and recognized standard that describes when an investment may be given the ESG label and is therefore a sustainable investment. ESG ratings and sustainability seals can provide guidance when choosing sustainable investments, despite different focuses.
As an investor, you decide in which stocks, ETFs or funds you invest your money. You can do your own research for companies whose corporate goals correspond to your ideas of economic, social and ecological sustainability.
Sustainability : Make impact-oriented investments in sustainable funds, stocks and ETFs.
Health : Promote innovative products and services in the health industry with your investment and benefit from the boom in the health sector.
Technology : Our present and our future are significantly shaped by technological developments. Invest in the innovative technology industry.
Consumer trends : Benefit from tomorrow’s trends.
Robotics : Automation, artificial intelligence and robotics are among the megatrends of our time. Invest in robotics, the technology of the future.
Cybersecurity : Security in information and communication technology has become essential for many companies. Bet on the cybersecurity trend on the stock exchange with selected securities.