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Far from trendy, sustainable investing is gaining ground on the
investment landscape
Sustainable investing considers that progress toward solving global challenges – such as climate change, social inequality and unfair business practices – can be made by investing in companies and enterprises that promote sustainability or have sustainable business practices. This is not to imply that other forms of investing are unsustainable. Rather, this approach aims to equip investors with additional information when choosing investments to help meet all of their financial goals. Sustainable investing is also referred to as ESG investing for its consideration of environmental, social, and (corporate) governance factors.
It’s not just about feeling good
Beyond achieving the confidence that your investments are having a positive impact, studies have shown that companies which operate in a sustainable manner tend to provide better investment performance1. There are many factors playing into why these companies may outperform, ranging from the ability to attract and retain better human capital to sourcing resources using sustainable means.
There is a growing belief that if companies ignore ESG factors, they may become vulnerable to increased regulation or be required to pay punitive fines to governments. The CFA Institute found that 63% of investors who take ESG issues into account when making investment decisions do so to help manage risk as a part of their long-term financial plans.²
1. Forbes, “Socially-Responsible Investing: Earn Better Returns From Good Companies,” August 16, 2017.
2. CFA Institute, “Environmental, Social and Governance Issues in Investing,” October 2015 (page 11).
Why Investors May Consider Sustainable Investing
Risk Mitigation
Companies that ignore their social and environmental impacts may face regulatory and governance risks.
More Conscious Approach to Investing
Investors may aim for a positive impact or avoid ties to questionable activities.
Long-Term Performance
Companies with a negative reputation or poor business practices may not be sustainable.
Align Investing With Personal or Religious Values
Investors may not feel comfortable investing in companies whose business practices they view as morally objectionable.
Fiduciary Duty
Professional asset managers have a responsibility to invest within certain standards that represent their clients’ interests, which would likely make investments in companies with unsustainable practices less appropriate.
Sustainable investing may incorporate criteria beyond traditional financial information into the investment selection process. This could result in investment performance deviating from other investment strategies or broad market benchmarks. Please review any offering or other informational material available for any investment or investment strategy that incorporates sustainable investing criteria, and consult your financial professional prior to investing.
3601 Arapahoe Ave., Unit D179
Boulder, CO 80303
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Phone: 303.443.3406
Fax: 805.830.1122
3601 Arapahoe Ave., Unit D179
Boulder, CO 80303
Map & Directions
Phone: 303.443.3406
Fax: 805.830.1122
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