Going Green: Where You Put Your Money Can Make a Big Difference

With the COP26 summit just around the corner and the climate increasingly at the forefront of our minds, it has never been a more important time to consider our impact on the world around us. We all know how simple lifestyle changes can make a difference, but have you ever considered how changing your investments could make a positive impact on the planet?

You may not have realised, but there are a growing number of fund managers investing in companies that are striving for change, not only in terms of reducing emissions, but also helping communities and saving resources in hope of creating a better world. There are numerous approaches adopted but often you will see these types of fund labelled as ESG (Environmental Social and Governance), Responsible or Sustainable.

What does this actually mean? Well, each fund manager who runs one of these types of funds will use a set of criteria when picking which companies they invest in to meet their environmental or social aims. They could choose include certain types of companies based on their positive contribution to the planet, such as those that make wind turbines or make electric vehicles, or they could choose to avoid investing in companies that don’t align with their ESG aims, such as oil companies or those with poor labour standards.

ESG matters because it gives investors the tools to build plans that reflect their principles, but more importantly, ESG can help push for change. Thanks to ESG investing, companies are held accountable for their actions and are urged to do better. By turning towards a more sustainable investment strategy, investors are increasingly showing businesses that they have to actively find ways to increase their contribution to the environment and society or they might miss out on financing opportunities if they continue to ignore such issues.

Saving for the future is important, and so is staying true to your values. If you’re looking for ways to make a difference, then going green with your investments is a great way to start.

To find out more about how to get into ESG investing or any other financial planning needs you may have, please contact me at nkidby@chilternconsultancyltd.com or call 07774 264356.