Investing sustainably: Boom in sustainable investments

Invest sustainably in good conscience. Green consumption is gaining traction.

Sustainability is trendy. Millennials in particular place great emphasis on green consumption. Investors can also benefit from this if they invest sustainably. After all, sustainable investments currently have above-average growth potential.

Green consumption is creating economic growth

The Pacific Ocean has a floating island of garbage three times the size of France, glaciers are melting at an alarming rate, sea levels are rising, and the oceans are getting warmer. Climate change is real and it is rapidly getting worse. Governments are increasingly aware of the seriousness of the situation and are rolling out new measures all the time.

Businesses and consumers are just as committed to the cause, taking positive action in the interest of sustainability. Based on a projection by Accenture this trend toward more environmental awareness is likely to yield an additional USD 4.5 trillion in global economic growth by 2030.

Millennials stand out for green consumption

Millennials stand out in particular when it comes to green consumption. In a recent survey by Deloitte, around 30% of the millennials polled stated that their greatest social concern involved climate protection. And in a study by Harvard Business Review, two-thirds of the millennials surveyed said they buy sustainable brands – even when this sometimes means higher prices. In other words, companies need to do everything they can to close the gaps between customer preferences and effective action.

Concerns over nature are pushing millennials toward green consumption

Concerns over nature are pushing millennials toward green consumption

Source: The Deloitte Global Millennial Survey 2019

Green consumption is experiencing above-average growth

There is a clear trend: An increasing number of consumers are environmentally conscious in their habits, which is boosting demand for sustainable products and services. This opens up great opportunities for innovative companies. A study by the New York University Stern School of Business (NYU Stern) revealed just how much a sustainability seal pays off for a company. In the US, products with a sustainability certificate achieved sales of USD 114 billion in 2018. That's roughly 30% more than five years ago. Consumer goods labeled as sustainable have thus exhibited much stronger growth than non-sustainable ones. This upward trend is likely to continue.

Sustainable investments benefit from strong demand

Sustainable investments benefit from strong demand

Source: NYU Stern, "Research on IRI Purchasing Data (2013–2018)"

Good prospects for sustainable investments

Companies that take notice of consumers' desire for greater environmental protection early on and adapt their business strategy accordingly have a good chance of experiencing above-average growth as a result. An example of this can be seen in Graphic Packaging International. The company produces innovative cardboard packaging for food products and is particularly mindful of sustainability and social responsibility. This approach is paying off. The global rise in demand for eco-friendly food packaging led its sales figures to climb from USD 4.4 billion in 2017 to USD 6 billion in 2018.

This strong performance is a signal to investors to not miss out on the sustainability trend, either. There is a wide range of potential products here, so a personal consultation can help you make the right choice. One option is the Credit Suisse Responsible Consumer Fund. An Advisory Board comprised of in-house and external experts ensures that this fund is at the forefront in the area of sustainability. This is likely to pay off since there is also strong growth potential in the future for sustainable investments and investments in green consumption.

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