What is sustainable investing?

Sustainable investing is an investment discipline that considers Environmental, Social and Governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.

  • Environmental:  Climate Change, Natural Resources, Pollution & Waste, Environmental Opportunities
  • Social:  Human Capital, Product Liability, Stakeholder Opposition, Social Opportunities
  • Governance:  Corporate Governance, Corporate Behavior 

For more information visit https://www.msci.com/esg-101-what-is-esg/evolution-of-esg-investing

Traditionally, sustainable investors have focused on positive/best-in-class screening, negative/exclusionary screening, ESG integration, impact investing and sustainability themed investing.   

An important segment, community investing, seeks explicitly to finance projects or institutions that will serve poor and underserved communities in the United States and overseas.

According to the US SIF Foundation’s 2020 Report on US Sustainable and Impact Investing Trends, as of year-end 2019 one out of every three dollars under professional management in the United States—$17.1 trillion—was managed according to sustainable investing strategies. 

Just as there is no single approach to sustainable investing, there is no single term to describe it. Depending on their emphasis, investors use labels such as: “community investing,” “ethical investing,” “green investing,” “impact investing,” “mission-related investing,” “responsible investing,” “socially responsible investing,” and “values-based investing” among others.

How do sustainable investment funds perform?

Sustainable investing spans a wide and growing range of products and asset classes, embracing not only public equity investments (stocks) but also cash, fixed income and alternative investments (private equity, venture capital and real estate). Sustainable investors, like conventional investors, seek a competitive financial return on their investments.

For the full article and more information on sustainable investing visit the Forum for Sustainable and Responsible Investment https://www.ussif.org/sribasics