What is meant by sustainable investing?

Sustainable investing refers to a range of different types of asset classes and investment approaches. Some types of sustainable investing focus on using investor capital to make the world greener. Others focus on generating financial returns by looking for opportunities in companies that are likely to do well in a low-carbon economy, or by reducing exposure to climate change risks. 

The sustainable investing spectrum

Investors can invest sustainably through a number of different approaches. The sustainable investment universe offers a spectrum of strategies so investors can build a portfolio based on personal goals, values and risk appetite. 

Investing to target competitive financial returns, with limited or no consideration of ESG aspects in the investment approach.

Avoiding harmful investments that don’t match your values. Investors can choose to actively exclude sectors or companies in controversial business areas – for example, weapons or tobacco. 

Using data on environmental, social and governance factors alongside traditional financial research when evaluating risks and opportunities of an investment decision. 

Allocating capital to gain exposure to high impact, and often high growth, companies that place the UN SDGs at the center of their purpose and operations.

Where an investor is allocating capital with the explicit intention of having a positive, measurable social or environmental impact, in addition to financial returns.

Donating money to address societal challenges without generating a financial return.

How does sustainable investing work?

Sustainable investing works by identifying companies that are finding ways to turn the world’s big problems into profitable business models. Companies may do this through developing new technology or materials, or by looking at society from a different perspective. This innovation leads to solving a problem while generating profits at the same time. In turn, companies can make a positive contribution to the communities and local economies where they operate.

Sustainable Investment Framework

Our different client segments are seeking ways to combine the achievement of financial returns with the generation of a positive social and/or environmental impact. This is why our Sustainable Investment Framework focuses on the application of ESG criteria and creating transparency for clients utilizing several approaches to sustainable investing strategies: exclusion; integration; sustainable thematic; and impact-aligned investing.

 

This framework summarizes our approach on sustainable investment while bringing transparency to this ever-evolving space.

21/11/2022
21/11/2022