Sustainable investing is rapidly becoming part of the global investment mainstream.
For those who want to align their values with environmental, social and governance issues, you are not alone. The demand for companies to actively report and to adhere to sustainable practices has grown substantially, making investment in sustainable practices a more transparent process and allowing for more choice.
With more options comes the opportunity to discern which companies are committed to high standards in this category.
At Carlton & Company Financial, we’ve been assisting ESG-oriented investors since our beginning.
Sustainable Investing – Who is Driving Its Growth?
The percentage of S&P 500 companies reporting their sustainability efforts increased from just 20% in 2011 to 82% in 2016. 1 Today that number exceeds 85%!
The increase is extraordinary. Consider that Morningstar®, the company recognized for developing the well-utilized investment rating system, recently introduced its Morningstar Sustainability Ratings. This was created to help evaluate how individual mutual funds and ETFs are meeting sustainable practices.
Sustainable Investing – What the Research Shows
As of September 2016, 1,055 asset managers had signed the UN-backed Principles for Responsible Investment, committing themselves to incorporating sustainability issues into their investment processes1. Many studies have taken place on the merits of sustainable investing. However before I go farther, an introduction of what 'SRI' and "ESG' mean and how the terms evolved is warranted.