How are Ethics Impacting Investing?
An increasing focus on ethical, governance and social issues is impacting on the world of investing, boosting awareness of ethical investments and broadening interest in investments that make the world a better place.
Many more investors are now considering the impact of a business on a variety of factors, such as the environment, or how they treat their employees. This is a more recent approach to ethical investing that integrates the traditional negative screening, where investments focused on simply avoiding businesses around specific industries such as tobacco.
According to a biennial report released by the Global Sustainable Investment Association, ethical assets had grown by 25% in 2016. This statistic shows that more people are considering these investments. This is likely to have impacted many businesses as a result, who are responding to this increase by adopting practices that have a positive impact on ethical, social and governance factors.
Experts have also noted the increase in responsible investing, with investors growing more interested in how their investments positively contribute to the world around them, across the whole supply chain. This could involve fair trade practices, positive contribution to the environment and corporate social responsibility.
The rise in ethical investing could be due to investment performance, which is not likely to be an issue in recent years as many ethical investments don’t present a statistically different rate of returns compared to the rest of the market.
With ever increasing focus on global warming and environmental issues, it’s not unlikely that many people have chosen to invest in businesses that are prepared for the renewable future.
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