Whether you’re looking to build, protect, or grow your investment portfolio, you need to base your investment decisions around a variety of factors in order to find investments which have the potential to meet your financial goals. You might consider factors like a company’s past performance, a colleague’s advice, market trends, or portfolio diversification.
Each investor makes unique judgement calls every time they make a decision to build or update their portfolio. And while it’s important to not make these judgements for emotional reasons, is it possible that there are other considerations you should take into account?
For example, how important is it to you that companies you invest in uphold certain ethical standards? Does it make a difference whether Company A has greater carbon offsets than Company B? Or whether Company C is committed to sourcing only organic inputs?
Sustainable investing is a component of investing that is related to investors finding companies that align with their moral and ethical standards. After all, if you’re going to invest your money with an organization, you may enjoy the confidence that comes with knowing your dollars are doing work you agree with.
Lead with Your Values
You know it’s important to bring your values to the table when you build your financial portfolio. After all, it’s your values, rather than your emotions, that should shape your priorities and investing behavior.
When it comes to sustainable investing, your values will take an even more obvious lead in guiding your investment behavior. If, for example, you’re concerned with environmental issues, you might want to learn more about green investment options.
The concept of sustainable investing makes it possible to make sound investment decisions that fit your personal values and long-term financial goals. In fact, many investors find that companies that are committed to doing societal and environmental good may well have a similar commitment to financial responsibility, meaning that they might perform better over time.
Find Companies Committed to Doing Good
Sustainable business practices are becoming more and more popular, which means that it’s even easier to learn whether companies you want to invest in operate in a way that you agree with. In fact, many companies have started to include sustainability reports along with their annual financial reports.
If you want to find companies that are making the kind of difference that you want to see, you can talk to your financial advisor about finding information on companies’ sustainability and corporate social responsibility reporting.
Balance Your Portfolio
If you choose to go the sustainable investing route, you can balance your portfolio with sustainable investment options in a number of ways. Maybe you want to dip your toes into sustainable investing by choosing one or two companies to add to your portfolio. Or perhaps you’d like your portfolio to boast a larger percentage of sustainable companies.