Do something for yourself and the next generation with sustainable investments
Tracking financial and sustainable goals at the same time, building your own fortune while doing something for society or the environment – that sounds good? Then maybe you should take a closer look at sustainable investments.
What are and how do sustainable investments work?
Classic investments, for example in equities, should primarily be profitable and contribute to better liquidity, while minimizing risk for investors. All these goals are pursued by sustainable investments as well. At the same time, they additionally take into account so-called ESG criteria. Simply put, sustainable investing means investing money taking into account ecological, ethical and social aspects. ESG stands for E nvironmental (environmental), S ocial (Social), G overnance (corporate governance).
- Environmental: Investment in renewable energy; Production under environmentally friendly conditions
- Social: compliance with labor law provisions, such as prohibition of child labor; fair / reasonable remuneration; equal pay for men and women for equal work
- Governance: transparent corporate governance that avoids corruption; Sustainability management at all levels of the company
In this specific case, investing in a sustainable investment, for example, in a fund or share of a particular company or company. Here, the money is used profitably, but taking into account the above principles (ethical, environmental, social).
If you want to invest money sustainably, for example, invest in:
- Companies committed to organic food production
- Wind or water parks
- solar systems
- Companies that specialize in the production of organic clothing at home and abroad
Conclusion: A sustainable investment works in principle like any other investment. Investors buy shares in a company or acquire units of a fund company. In the case of a closed-end fund, you will make your money available to the company for a pre-agreed period and will receive it back after it has expired. As usual, you need a normal securities account for the investment . As a result, you can generally earn as high a return as you would with any other form of investment. At the same time, sustainable investments are also subject to the risk of fluctuations in value or total loss. Decisive difference: In the context of sustainable investments, principles of sustainability are taken into account and ethical, ecological or social standards are adhered to.
By the way: A sustainable project does not necessarily have to fulfill all three of these criteria. A company can also specialize in one thing.
Investing sustainably – what should you pay attention to?
Investing sustainably means that the companies in which you invest develop, produce, distribute and sell according to ethical principles. However, the term sustainable investment is not protected. It is therefore fundamentally possible for providers to offer their financial product as “sustainable”, without corresponding standards being observed in practice. Unfortunately, there is currently no recognized quality seal. Therefore, inform yourself in advance of a corresponding system. Reputable banks or providers work so transparently that investors can understand exactly how and for what their capital is used and whether employees find fair working conditions. If you invest money and want to find out more about it, or are still looking for the right investment, you will find not only “sustainable investments” but also other terms that inform you about the relevant facts:
- Green Money
- Ethical investment
- Responsible Investment
- Social investment
- Green money
- Sustainable Investment