Are We Living In An Era Of Responsible Investment?
by Abdul Aziz Mondal Investing Published on: 18 November 2021 Last Updated on: 07 November 2024
Our society is ever-changing, and just as quickly, financial trends change to adapt and cater to current demand and needs. Recent events have brought to the fore multiple social and especially environmental issues. Therefore it is no surprise that more and more individuals have gained a new sense of responsibility and, with it, an appetite for sustainable and responsible investment opportunities.
What Is The New Sense Of Responsibility?
A recent survey by independent financial advisors, Saunderson House, has found that there is a growing sense of responsible investment and an increased desire to make decisions based on personal values. The responsibility means your investments are not going to harm nature and influence the concerning parts of nature.
The High Net Worth Individuals (HNWIs) that responded to the survey identified a change in what they consider major concerns – and this change, in turn, influences their approach to investments. These concerns varied from future generations and financial worries (due to the pandemic fallout) and environmental woes.
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What Is Flexitarian Investing?
Many choose to take a ‘flexitarian’ approach to investments where part of an investment portfolio is dedicated to responsible investment, however for most, this innovative form of investing can be taxing as there are a few key barriers for investors, including knowledge, understanding, and access to information.
Flexitarian investing is like a flexitarian diet. More you are doing for the environment and nature you will start to benefit more from it. Flexitarian investing is more like investments where the effects are not going harmful for the future economic and natural aspects.
Flexitarian investing has a very long-term effect on global warming. So when you are planning to invest somewhere, research the harmful side effects of the investments.
Are Sustainable Investments Worth It?
As previously mentioned, priorities and concerns have changed for many investors. The key motivator behind the sustainable, responsible investment increase tends to be a desire to improve the lives of future generations, especially when climate change and other global issues are so prevalent in the world right now.
Nonetheless, the aim of investments is still to create wealth, and research shows that sustainable investments can potentially lead to higher returns. Thus, investors can continue building wealth without sacrificing their newfound values. More you focus on responsible investment. Your assets are going to be more sustainable.
Harmful unsustainable product productions are going to be restricted. And when you are analyzing the long-term effects of getting it, you will see how these are going to affect your economic status.
For example, when you are buying the share of any company which is manufacturing harmful products for nature. After a certain time, this is going to impact your economic status.
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Generational Opinions
49% of respondents to the survey indicated that they agreed that they had a duty to use their wealth responsibly to aid in environmental and social improvement, while as many as 66% agreed that ESG investments should be a part of their investment portfolio.
As with everything else, there are generational differences with younger generations (namely Millennials) feeling a stronger sense of responsibility, but many from older generations felt that it was important too, along with good business sense.
Many times we have seen, especially for material investments, the effects are harmful to nature. And have a substantial impact on the global environment. Even these types of investments are not going to bring profit for you. So it is better to fix your choice for the responsible investment and after some time these harmful products productions are also going to affect.
Conclusion:
The many shocking events since 2020 have led to a sharp rise in responsible and sustainable responsible investment, which has raised confidence for future generations and it also offers investors the opportunity to put their money to good use, working not only for the individual but for a better and more responsible society.
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