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Welcome to our new sustainable and responsible investment hub
by James Poulter on Mar 07, 2013 at 10:36
Welcome to Citywire’s coverage of sustainable and responsible investments (SRI) produced in association with Alliance Trust Investments. Over the coming months we will be covering all the developments and issues in sustainable investing – a rapidly growing part of the industry.
Sustainability themed investments aim to include an understanding of environmental, social and governance (ESG) issues into the investment process, while delivering financial returns. Growth in this area of investment has primarily been driven by professional investors, but there is significant interest from retail investors.
When considering ESG factors, investors are evaluating corporate behaviour, this can help determine the future financial performance of a company, despite these being non-financial performance indicators.
Climate change and the damage business causes to humanity and the planet are all pressing issues society needs to urgently address, with policymakers continually failing to meet these challenges, sustainable investment could offer an opportunity resolve many of these problems.
As a relatively new concept SRI is hotly disputed, with some investors believing that taking a sustainable and responsible approach to investment reduces potential returns, while others believe financial markets are not capable of resolving the environmental and social problems we face.
There are many different strategies used by sustainable and responsible investors, such as exclusions, avoiding investments in companies involved in certain types of products, services or activities. Screening is another popular strategy which involves evaluating certain minimum standards of corporate behaviour.
Whatever you think about SRI, we hope we’ll be able to shed some light on this exciting area of investment and we hope you will find this interesting and informative.
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