Published On: Tue, Jul 20th, 2021
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Top tips: How to invest sustainably and fuel change in the world | Personal Finance | Finance


Investing in itself requires involvement directly from the investor, but sustainable investing even more so to ensure that ones funds are empowering companies that align with their personal values. Adam Robbins, UK senior investor relationship manager for Triodos Investment Management shares his top tips on successfully investing sustainability.

Do your homework

“Next, research is key.

“The best way to make sure your money is aligned with your values is to be as informed as possible about how it’s being used and what impact it will create.

“Doing some digging into the investments you’re considering takes a little time, but is worth it to ensure you’re not inadvertently investing in practices or products you don’t support – such as arms or fossil fuels.

“You can do this by asking for the full list of companies included in any fund you are considering investing in and checking if these match your values.

DONT MISS: 

Consider funds that filter in the positive – instead of just avoiding the negative

In an industry where wording is key, it is easy to fall for fluid marketing and soothing wording, which is why thorough research is so important to ensure that the company isn’t sustainable only on the surface, also known as “green-washing”.

“Many investment products claim to be “sustainable” solely because they filter out specific companies or industries, such as tobacco or fossil fuels.

“However, this doesn’t mean that your money is actually being used to do good,” Mr Robbins explained.

“Impact investments, on the other hand, filter in the good as well as screen out the bad, and are designed to generate a positive, measurable social and environmental impact alongside a financial return.

“This can help pioneering and innovative companies make a positive difference, thereby contributing to a more sustainable future.”

Choose a trusted partner

In the investing sector the amount of choice seems limitless, but between avoiding “greenwashing” and finding the right products that are having a positive impact, there is also the potential for misplaced trust.

Mr Robbins explained: “Across the industry, it’s a serious issue that the standards and definitions used for sustainable investments – often referred to as a green ‘taxonomy’ – are not robust enough, but this is being addressed.

“Meanwhile, with no standardised terms in place, some companies and funds can make sustainable claims that don’t stand up to scrutiny – for instance, not all funds labelled as “ethical” exclude fossil fuels.

“Elsewhere, some providers may advertise that they will plant a tree for every new customer, but then invest heavily in industries contributing to deforestation.

“To avoid this, choose a financial provider that has an entire business committed to positive impact rather than offering just one or two options, and look for those that operate to the highest standards of transparency, so that you can trust you can see the full picture of how your money is being used.” Mr Robbins concluded.



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