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Sustainable Investing

Increasingly more people realize that their sustainability concerns can be addressed through their investments. You may have heard various terms used to describe sustainable investing—socially responsible investing, ethical investing, impact investing, among others; fundamentally describe the same thing:

Investments made with the intention of generating a positive environmental, social, and governance (ESG) impact alongside a financial return. Investors commonly use sustainable investing to pursue two overarching goals:

  • To enhance long-term financial value through addressing ESG risks or investing in solutions to solve environmental and social challenges.
  • To enhance, or otherwise positively impact the long-term health of the environment or society through expressing ESG values.


Some examples of ESG issues that may be considered in an investment strategy:

Environmental

Greenhouse gas emissions, energy management, and water and wastewater management.

Social

Access and affordability, labor relations, and diversity and inclusion.

Governance

Compensation and benefits, data security, and supply chain management.

Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.

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