Sustainable Finance / Sustainable Investment
Sustainable Finance can be segmented into various sub sections. Finance can mean lending, so Sustainable finance can mean lending for sustainable purposes. Finance can also mean investing, so Sustainable investing means investing for the future in a sustainable way.
Some of the jargon and acronyms you may encounter are:
SRI : Socially responsible Investing
E.S.G : Environmental, Social, and Governance
Green Bonds / Green Investing / Green Finance
All of these styles do have their own particular attributes, however as an umbrella term, Sustainable Investing is an easy way to describe them all.
Traditional investing does not take into consideration the externalities or side effects of it's investments. Traditional fund managers were only interested in maximizing returns, regardless of the costs to the environment or society. Government regulation on companies was the only tool available to prevent reckless corporate behavior. As we have seen over the last few decades, this was not enough to promote positive corporate actions and ethos in all cases.
Sustainable finance & investing is a response to this. Governments, regulators, and people like you have become more aware of the pitfalls of traditional investing and have started to hold investment fund managers and companies to a higher standard.
In practice, the application of sustainable investing can take various forms, however, responsible investment is a proven tool to future proof your portfolios.
At Ethico, we are happy to advise and give clear comparisons between the various types of sustainable finance, and show you how to avoid "greenwashing".
If you wish to discuss Sustainable investing in more detail please make contact and one of our advisors will discuss your options in plain language with no jargon.