Your investment doesn’t have to benefit just you, it can also benefit the world around you.
That’s the principle behind sustainable investments – namely that investing in well-managed businesses with interests in improving the environment or quality of life can deliver superior returns over time.
Many investment firms will have made a commitment to invest in sustainable stocks. Some even offer specialist sustainable pooled funds that specifically invest in companies involved in ethical or green industries.
Investor appetite for these kinds of investments is on the rise. Sustainable investment research firm EIRIS puts the amount invested in green and ethical funds at a record £13.5bn at the end of June 2014. They say that half of UK consumers are likely to jump ship to another financial provider if they have ethical concerns over the way it does business. It’s clear that investors care about the impact their money can have.
You might think that the worthier the investment, the lower the return – when in fact, it’s rarely the case. Many sustainable companies plug into growing social and environmental trends, producing products and technology that an increasing population will need ten, 20, and 50 years down the line, which means a greater and more robust return.