Investing, as a whole is a fairly straightforward concept. People allow their money to be placed with managers, funds, or in projects that they believe will eventually yield high financial gains. It’s purely about pursuing whatever brings in the highest yields. Or is it?
Ethical Investing is a buzzword that has taken over the industry recently. It’s a term that is the forefront of a larger movement. A movement that’s foundation is increasing capital but it’s end goal has a heartbeat. Investors are finding themselves more often asking questions like, where is my money going? What is its impact? Does it align with my personal beliefs? There is a strong push away from financing projects that lead to environmental degradation, arms, and weapons, or ones that do not align with personal and religious beliefs.
While ethical investing is gaining more ground it is still ignored by some. Some investors feel that they will be missing out on high returns if they choose projects based solely on their personally held principles. This, compounded with the fact that spending the time and effort it takes to research the ethical footprints, keeps some people away. Money never sleeps and many investors fear missing out on big deals because they were dissecting a companies mission statement.
Ethical Investing can sometimes be toted around as a free-spirited, millennial backed, idealist pursuit. However, the numbers tell a much different story. According to US News in 2016 “the market for ethical investing topped $8.7 trillion of professionally managed assets that use strategies related to climate change, human rights, weapons avoidance or corporate governance,” and that number continues to grow.
Responsible investing, at its core, is appealing to many investors because it allows them to feel empowered that their money’s value is extending past what it brings to them personally. There is an ancient Chinese proverb that reads “the best time to plant a tree was twenty years ago. The second best time, is now.” Ethical spending allows us to lay the groundwork for a more sustainable world. It’s time to roll our sleeves up. It looks like the investing world has some trees to plant.