We all know how big corporate companies affect the environment, and at the same time, how our consumption of the products and services they produce and provide do the same.
There are many actions we can take towards living more sustainably; reducing waste, eating less meat and recycle - but what's rarely spoken about is our investments and saving funds.
To drive change in companies towards more sustainable practice and development, we need several factors to pull in the same direction. We need governmental laws and regulations, consumers rejecting to purchase from dirty companies destroying our planet, as well as people, investors and banks investing in sustainable companies, as well as withdrawing investments from the dirty companies.
Most of us have some savings, either a pension fund, saving funds or stocks, with capital invested in various companies around the world. Whenever you invest in a stock or a fund (which contains a selection of stocks), you are voting for these companies to grow, produce more and make a profit. If you're concerned about the environment, and at the same time exclusively invest for financial benefit, you need to reconsider your savings.
Sustainable consumption and production are about promoting resource and energy efficiency, sustainable infrastructure, and providing access to basic services, green and decent jobs and a better quality of life for all. Its implementation helps to achieve overall development plans, reduce future economic, environmental and social costs, strengthen economic competitiveness and reduce poverty.
If you are serious about protecting the planet, reducing carbon emissions and live more sustainably, you need to consider your savings in your carbon footprint calculations. By diversifying your portfolio with ESG and green funds and stocks, you are voting for and supporting their activities and productions - and again make a positive impact on society and the environment.
If you're not sure where to start looking for sustainable companies, funds or stocks, begin with ESG; meaning environmental, social and governance criteria that are a set of standards for a company's operations that socially conscious investors use to screen potential investments.
The interest around ESG and conscious companies are increasing, especially in younger generations. Together with regulations from national and international governments, as well as the UN sustainability goals closely linked to the Paris agreement, there is no other direction than the green one in the future. It is a common belief that investing sustainably will decrease your return, but that is far from the truth. ESG companies, in the opinion of many investors, will be both financially and socially profitable, both today and in the future.
1. ESG performance and share price performance are clearly linked.
2. Long-term trends remain positive despite headwinds in 2016 and 2017.
Read the full report for more facts and history on the ESG performance by Nordea Markets.
Companies unwilling to adjust to the green shift will be more vulnerable in the future. With changed consumer behaviour, media digging stories on companies dumping waste or using child labour and new sustainability regulations; dirty companies will be extremely vulnerable to fines, loss of customers and other critical factors that will affect production and profit.
UN Sustainability goals: https://www.un.org/sustainabledevelopment/sustainable-consumption-production/
ESG investing: https://www.investopedia.com/terms/e/environmental-social-and-governance-esg-criteria.asp
Nordea Markets: https://docs.nordeamarkets.com/research-insights/equity-quant-esg-20180607/?page=2
Book: Guld och Gröna Skogar Sesja Beslik & Karim Sayyad