Investing for good

The world is facing huge challenges. If we want the world to be a better place for the next generation, we need to face up to these challenges today.

Each of us can take action through our everyday choices whether travelling more by public transport, recycling, reducing the amount of water we use – we can make a small difference.

But did you know that your money can make an even bigger difference? The way we put our long term savings to work can play a big role in shaping the world around us.

Your money could be invested in companies that are working on solutions to the world’s biggest environmental and social challenges, such as companies that develop vaccines, generate renewable energy, tackle inequality, build affordable homes, manufacture electric cars and provide clean water.

By investing in some companies and industries that are looking to address some of the world’s greatest problems, your money has the potential to grow while helping to fix some of the world’s greatest problems.

Millions of people across the world are investing in this way, with a long-term view and consideration of the future for people and the planet.

How does Responsible, Sustainable and Impact Investing work?

Investment experts use a range of factors to decide where to invest.  One of the things that is considered when selecting investments is whether they do any harm to the planet.  Investments are screened and some don’t make it through the first filter like controversial weapons.

As well as the potential for returns, experts also look at three important areas;

These are known as ESG (Environmental, Social and Governance) considerations.

Working together to address some of the world’s biggest problems

The United Nations have a number of goals which highlight the world’s biggest problems. Goals to combat things such as poverty, famine, and gender inequality. Governments and companies all over the world are signing up with the drive and ambition to meet these goals and help solve the issues facing our planet. Many funds that invest with a social or environmental outcome in mind can be matched up against one or more of these goals and have specific targets in helping to meet these goals. A number of factors are then used to measure the positive outcomes the investment has made for society and the planet. For example, the positive outcomes of a renewable energy company could be measured by looking at the level of carbon emissions. By analysing this over the longer term we can see the good and positive change the investment is having.

Investing with social or environmental outcomes in mind isn’t new and lots of people are doing it

Your money can be used to invest in companies that are helping to solve some of the global challenges and contribute towards a healthier planet. And more and more people also want to make sure that any potential negative social or environmental outcomes of their investments are mitigated.

This can be done by, for example, excluding investments in certain industries such as coal or tobacco or by identifying companies that violate global norms in the areas of human rights, labour standards, environmental standards and anti-corruption.

Your money can be used to invest in companies helping to solve global challenges and contributing towards a healthier planet.

Companies that develop carbon capture technology, reduce plastic pollution, build transport links around the world, and give more children access to education; companies that create and innovate for a better future.