‘Sustainability’ in an investment sense refers to actions that promote better social and physical environments around where they are implemented. These actions may promote cohesiveness and social equality, contribute to positive development of the health of the ecosystem and reduce resource scarcity or address environmental pollution. Sustainable investment is designed to ensure a human face to investing, which considers more than just profits.
Is sustainable investment a viable option for all parties involved?
An analysis of different research studies shows correlation between sustainable investments and positive performance for brands on the stock market. 4 out of 5 studies on the topic suggest a positive relationship between stock price and ideal sustainability practices. 90% of these studies express a relationship between improved operational performance and the implementation of sustainability practices.
The impact of sustainability practices exceeds these performance based metrics. It could significantly influence the cost of capital, as well as markedly affect stock performance. Over time, investing in sustainability will exceed the performance of a standard investment, which suggests that it could offer better value for all parties.
What are some sustainable investment tips?
Sustainable investment, which is also called socially responsible or impact investing eliminates the likelihood of harm caused by an investment strategy, whether physically or socially. Sustainable investment can be tough for brands to implement without an actionable framework. Here are the top sustainability tips for brands.
You should regularly review your holdings
The first step to making sustainable investment is to understand the resources available to you and to develop a working plan that incorporates their use in investment. After this, you need to develop a sustainable investment target that will guide the development of your company’s goals. This way, you will be able to identify resources that can be channeled to more sustainable use.