Sustainable investing used to be a niche area; however, it is increasingly being recognised that companies who are environmentally responsible, socially positive and well-governed are well placed to deliver superior investment returns. Corporate scandals at Volkswagen, Facebook and Carillion have demonstrated the potential detriment to shareholders of investing in companies with poor environmental, social and corporate governance standards. This is leading more and more investors to consider sustainability as part of their investment decision-making process.
For individual investors, sustainable investing might also be an extension of how they approach other consumer choices. Those who seek to understand the environmental and social context of the products they buy are increasingly bringing the same kind of awareness to their investment decisions too.
When you consider that sustainable investing both offers the potential for better returns and satisfies a growing desire from investors to make sustainable choices, it’s not hard to understand its rise in popularity.