Modified on: November 2023
Ethical Investing: Good For the Planet, and Your Portfolio
Navigating the Future with Ethical Investing in the Era of Climate Change
In the recent awe-inspiring Planet Earth III documentary, the reality of climate change and the alarming rise in sea levels was vividly brought to life. This growing environmental crisis calls for immediate action across all fronts, including the world of finance. Ethical, sustainable, and ESG investing emerges as a beacon of hope, offering a path where financial decisions align with the urgent need to protect our planet.
Understanding Ethical/Sustainable Investing
Ethical investing, also known as ESG (Environmental, Social, and Governance), is more than a trend; it’s a revolution in the investment world. According to Morgan Stanley, at the end of June 2023, more than $3 trillion was invested in ethical funds, representing 8% of all investments. These figures are expected to continue rising over time.
Ethical investing represents an approach where investments are made in companies that promise financial returns and contribute positively to environmental and social goals. The surge in ethical investing popularity reflects a fundamental shift: investors are increasingly conscious of how their money can impact the world.
Climate Change and Rising Sea Levels â The Urgent Need for Action
The stark realities of climate change, highlighted in documentaries like Planet Earth III, are not just a future prediction but an ongoing crisis. Rising sea levels threaten coastal communities, disrupt ecosystems, and pose a significant risk to global economic stability. In this scenario, ethical investing isn’t just a financial strategy but a survival tool. Investors can play a crucial role in mitigating climate change impacts by channelling funds into sustainable practices and green technologies.
Ethical Investing and Your Financial Goals
The misconception that ethical investments are less profitable is rapidly being dispelled. Studies have shown that sustainable investments often perform on par with, if not better than, traditional investments. According to a study by Morningstar, over the past ten years, the average annual return for a sustainable fund invested in large global companies has been 6.9% a year, while a traditionally invested fund has made 6.3% yearly.
This performance and the satisfaction of contributing to a positive change make ethical investing appealing to a broad spectrum of investors. It proves that aligning your investments with your values means doing something other than compromising on financial returns.
Our Ethical Investment Approach
At our firm, ethical investing isnât just a concept; itâs a carefully crafted strategy that aligns closely with the principles outlined in the United Nations Global Compact. This approach ensures that our investment decisions support broader global objectives beyond financial returns.Â We invest in line with the principles of the UN Global Compact, encompassing human rights, labour, environment, and anti-corruption. By investing in companies that adhere to these principles, we ensure our portfolios reflect the highest standards of ethical responsibility.
Our investment philosophy is rooted in achieving long-term, sustainable growth. Companies committed to ethical practices offer strong potential for sustainable returns over time, reflecting the growing global emphasis on responsible business practices. By integrating the principles of the UN’s Global Compact into our investment strategy, we offer our clients the opportunity to invest in a way that meets their financial goals and contributes meaningfully to a sustainable and equitable global future.
Making a Difference Through Investment
The impact of ethical investing extends beyond financial statements. It’s about creating a ripple effect of positive change. For instance, you reduce carbon footprints by investing in a company that prioritises renewable energy. These investments are not just about financial returns but about shaping a sustainable future for future generations.
Ethical, sustainable, and ESG investing represents a robust response to the global challenges of climate change and environmental degradation. By choosing to invest ethically, individuals secure their financial future and contribute to a more sustainable and equitable world. Our firm is committed to guiding investors through this journey, helping them make choices that reflect their values and ambitions for a better planet.
Getting Started with Ethical Investing
Beginning your journey with ethical investing is straightforward. The first step is evaluating your current investments for their ESG impact, which can often be an eye-opening experience. From there, transitioning to a more ethical portfolio involves understanding your financial goals and how they can align with your values.
Our team is dedicated to guiding clients through this process, ensuring a seamless transition to ethical investing. If you’d like to learn more about ethical investing and how it can be integrated into your financial strategy, please schedule an initial consultation.
Your planet, your portfolio. Together, we can make a difference.
Financial Advisor Bristol and Pension Advisor Clifton
About us: Frazer James Financial Advisers is a financial advisor based in Clifton, Bristol. As an independent financial adviser, weâre able to provide independent and unbiased financial advice. We provide independent financial advice, pension advice, investment advice, inheritance tax planning and insurance advice.
If you would like to talk to a Financial Advisor, we offer an Initial Consultation without cost or commitment.Â Meetings are held either at our offices, by video or by telephone. Our telephone number is 0117 990 2602.
Frazer James Financial Advisers is located at Square Works, 17 â 18 Berkeley Square, Bristol, BS8 1HB.
This article provides information about investing but not personal advice. If you’re not sure which investments are right for you, please request advice.Â Remember that investments can go up and down in value, you may get back less than you put in.