Updated on Mar 02 2018
Sustainable, responsible and impactful investing (SRI) is a smart approach to investments that seek to positively impact social and environmental growth while delivering positive financial results to your personal investment portfolio. Investors who have sustainable investing in mind are able to accomplish not only monetary return, but also contribute to the betterment of society and the environment through their investments.
Once a niche market, SRI is becoming mainstream—even in the baby boomer population. If you are investing, check with a financial advisor to learn how you can invest in a way that not only generates long-term competitive financial returns, but also generates positive societal impact.
Investing with Purpose
If you are investing, why not invest in a way that reduces your carbon footprint or positively impacts your community?
According to BlackRock, Inc. the sustainable investing landscape “has evolved from a limited universe of investments focused on screening objectionable exposures to a range of solutions to achieve sustainable outcomes.” In fact, the demand for SRI investment approaches have grown 135 percent over the last four years, notes the Global Sustainable Investment Alliance.
Investors want to make a difference in their community—many of whom are baby boomers and have been positively impacting their community since the 60s. A recent global online study conducted by Nielsen found that the baby boomer generation values sustainability and is starting to take interest in sustainable and ethical investing. Not only that, but consumer-goods’ brands that demonstrate commitment to sustainability outperform those that don’t as people and the financial marketplace continually keep environmental, social and governance (ESG) factors in mind.
How large is the sustainable and responsible investing marketplace?
The U.S. SIF Foundation’s Report on U.S. Sustainable, Responsible and Impact Investing Trends identified $8.72 trillion in total assets under management at the end of 2015 using one or more sustainable, responsible and impact investing strategies.
There is undoubtedly a bright future in sustainable investing. Here are a few investment ideas to keep in mind and discuss with your financial advisor to help drive your investment goals while making the world a better place:
- Seek to reduce the carbon footprint of your portfolio
- Incorporate ESG into the core of your portfolio
- Target measurable impact and consistent returns
Investment preferences continue to change with the climate, both financially and globally. Marrying the two into a harmonious way to drive progressive change can help you not only reach your retirement goals, but also help you, and your children and grandchildren, live in a cleaner, more sustainable, environment.