Sustainable Investing
The surge in community interest in social causes has led to a seismic shift in the investment scene, with nearly half of investments in Australia being made ethically. Ethical investments are those that align with an individual or company's values and take into account environmental, social, and governance (ESG) issues during the investment selection process.
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Ethical investments can be categorized into different types:
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Sustainable Investments:
These investments focus on assets related to sustainability factors, such as green energy or water technologies. They aim to support companies and projects that contribute to a more sustainable future.
Screened Investing:
This approach involves excluding investments in low ESG sectors, companies, or projects such as gaming, weapons, tobacco, or fossil fuels. Instead, it includes investments in high ESG sectors, companies, or projects, such as green energy and medical research, in the investment portfolio.
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Impact and Community Investing:
Investments in this category aim to address social or environmental issues while delivering financial returns. They target projects or companies that have a positive impact on society or the environment.
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Corporate Advocacy and Shareholder Action:
This type of investment involves engaging shareholders to influence corporate behavior. Investors actively participate in advocating for changes in company policies or practices to align with their ethical values.
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Integration of ESG Factors:
This approach involves systematically and explicitly considering ESG factors in traditional financial analysis and investment decision-making. It recognizes that ESG considerations can have a material impact on investment performance and risk.
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When considering ethical investments, it's important to research and understand the specific criteria and values of the investment options available. The Responsible Investment Association Australasia (RIAA) is a helpful resource for understanding the basics and exploring further details.
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If you're interested in ethical investments, seeking guidance from professionals can be valuable. Our team can provide you with information and insights on the options available, helping you make investment decisions that align with your values and goals. Together, we can explore how to make your investments work best for you, your family, and the world you wish to see.
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