Investing in companies while focusing on positive social and environmental impact is the new trend. The trend has been fuelled by the need to solve the environmental, social, and governance issues that have taken a toll on societies and the environment for decades. Asset owners are increasingly turning to sustainable investing companies to provide the best route to reaching the masses through impact investments.
Sustainable investing Catalysts
Factors driving this new investing strategy include the perceived potential for attractive financial performance while also having an impact. Stringent regulations have also forced investors to turn to sustainable investments that rarely attract scrutiny from regulators. In return, they have been able to reach the masses through investments that address ESG issues.
Investors heeding urgent challenges such as climate change, the need for affordable housing, and appropriate governance structures have allowed sustainable investing firms to pool in huge resources that have gone to investments that have had a significant impact on communities and the environment.
Investors and institutions directing capital to projects and programs that directly impact communities have gone a long way in touching many people’s lives in ways few people could ever imagine. For instance, investments in affordable housing or the provision of clean drinking water have helped investors generate significant returns while at the same time transforming the lives of millions of people.
Encouraging Retail Investors
For the longest time, sustainable investing has been a domain for philanthropists and high-net-worth investors. However, not anymore. The proliferation of sustainable investing firms has played a pivotal role in encouraging retail investors to venture into sustainable investing and help address some of the ESG Advisory issues through investments.
Retail investors led by millennials are now the catalyst behind sustainable investing. The result has been an increase in capital inflows in projects that significantly impact the masses.
“Sustainable investing funds have earned the loyalty of retail investors by providing much-needed advice and guidance about the role and impact of sustainable investments. In return, capital inflow into projects and programs focused on addressing ESG issues has been on the rise all but benefiting communities” said, Ekaterina Chernova, The Altruist League’s Managing Partner.
Impact Venture Funds Role
The emergence of impact venture funds focused on normalizing sustainable innovation is also helping accelerate sustainable investments, which significantly impact society. The funds are increasingly assisting mission-driven founders worldwide in transforming the biggest challenges into massive business opportunities.
As the funds help investors transform challenges into business opportunities, the environment and societies have been the biggest winners. Sustainable investing firms and impact funds increasingly source funds that address some of the ESG issues, conversely reaching the masses with much-needed solutions.
According to The Altruist League’s President, Milos Maricic, “Sustainable investing companies are bringing in more capital that is helping address world challenges. While financial returns are guaranteed from the investments, the focus is on positive social and environmental impacts.”
Encouraging Impact Investing
Sustainable Investing Companies are also reaching the masses by encouraging people to invest in projects and companies whose core business revolves around ESG. Their efforts have been the catalyst behind increased capital inflows in green energy projects.
Investments in wind power and solar energy have skyrocketed in recent years. Investors are increasingly pursuing investments on this front, given the high returns guaranteed and the prospects of saving the environment by encouraging the use of clean energy. Investments in wind and solar energy projects have gone a long way in providing electricity to communities that have been in the dark for years.
Asset owners are increasingly pushing managers to focus on sustainable investments. The push is being driven by the need to have the maximum impact on the human race and environment while also pursuing market returns.
Asset owners are acknowledging that sustainable investing improves returns and comes to terms with the fact that their investments have the potential to transform the lives of millions of people worldwide. Similarly, most of them are increasingly focusing on non-financial outcomes optimum to focus on the impact. As the demand for ESG investment options increases, sustainable investing companies stand to reach the masses.