Four reasons why sustainable investing is becoming more popular (2024)

FAQs

Four reasons why sustainable investing is becoming more popular? ›

In the 1970s, socially responsible investing (SRI) emerged as a way for investors to align their portfolios with their values. This movement gained momentum in the 1980s with the divestment campaigns against companies doing business in South Africa during apartheid.

In the 1970s, socially responsible investing (SRI) emerged as a way for investors to align their portfolios with their values. This movement gained momentum in the 1980s with the divestment campaigns against companies doing business in South Africa during apartheid.

While traditional investment strategies might focus purely on profit and returns, sustainable finance looks at a holistic range of additional priorities, such as helping to build a better world, reducing damage to the environment and society, and creating long term sustainable opportunities for all.

The COVID-19 pandemic has reinforced the importance of ESG issues and accelerated the transition to a more inclusive capitalism. Investors increasingly believe companies that perform well on ESG are less risky, better positioned for the long term and better prepared for uncertainty.

More than three quarters (77%) of individual investors globally say they are interested in investing in companies or funds that aim to achieve market-rate financial returns while also considering positive social and/or environmental impact.

1987 The World Commission on Environment and Development publishes "Our Common Future," also known as the Brundtland Report; it weaves together social, economic, cultural, and environmental issues and global solutions; it popularizes the term "sustainable development."

The most commonly used sustainable investment strategies include: negative screening, positive screening, ESG integration, impact investing, and more.

The steady growth of ESG investing was greatly accelerated around 2013 and 2014 when the first studies were published showing that good corporate sustainability performance is associated with good financial results.

Global ESG investing

The vast majority of ESG fund assets are held in Europe, where sustainable funds account for 20 percent of overall fund assets, according to Morningstar.

It lets you align your money with your values while also avoiding risks. By focusing on ESG factors, you can invest with confidence by mitigating hidden risks associated with environmental regulations, social unrest, and poor corporate governance.

Is sustainability becoming more popular? ›

In summary. On balance more consumers have adopted a sustainable lifestyle in 2023 compared with a year ago. In the past 12 months there has been an increase in the proportion of consumers saying they have adopted a more sustainable lifestyle across 11 of the 23 sustainable behaviours we track in our research.

Addressing environmental challenges is a core factor investors look for in companies, as it is crucial for the future. This emphasis can go anywhere from reducing carbon emissions, waste management, energy efficiency, circular economy etc. It is also important to be transparent about such practices and targets.

$30.3 trillion is invested globally in sustainable investing assets. Data published in new GSIA report – Global Sustainable Investment Review 2022 – the 6^th edition of this landmark publication. In non-US markets, sustainable investment assets under management (AUM) have increased by 20% since 2020.

In the '60s, ESG became much more mainstream, around the same time as the evolution of the mutual fund industry, the civil rights movement, and the protesting and boycotting of companies involved in or in support of the Vietnam War.

The Early 2000s. The 2000s were a time of significant growth for sustainable and socially responsible investing (SRI). The Rockefeller Foundation laid much of the groundwork, coining “Impact Investing” as an umbrella term in an attempt to unite the fragmented industry into a collective network.

In 1987, the United Nations Brundtland Commission defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

History. The term Green Marketing came into prominence in the late 1980s and early 1990s. The American Marketing Association (AMA) held the first workshop on “Ecological Marketing” in 1975. The proceedings of this workshop resulted in one of the first books on green marketing entitled "Ecological Marketing".