As investors, we have a responsibility to not only generate returns but also to contribute positively to society and the environment. This is where Environmental, Social, and Governance (ESG) investing comes in – it's no longer just a trend, but a necessity.
The past decade has seen unprecedented growth in ESG investing, with assets under management reaching $30 trillion. This surge is driven by the increasing awareness of the devastating impact of climate change, social inequality, and corporate governance issues on our planet.
While some may view ESG as a moral obligation, it's essential to highlight its tangible benefits. Studies have consistently shown that ESG-focused portfolios tend to outperform their non-ESG counterparts, with reduced risk and increased long-term returns.
Moreover, ESG investing allows investors to align their values with their investments, creating a more meaningful connection between financial goals and social impact.
For those new to ESG, it's essential to start by understanding your values and goals. What are you looking to achieve through your investments? Are there specific industries or sectors that align with your values?
Next, research reputable ESG-focused funds and ETFs, paying close attention to their track records, fees, and investment strategies.