In a world where we are becoming increasingly aware of how every action and decision we make can have a detrimental environmental impact, are fund managers turning towards more sustainable and non-plastic alternatives? And, is the responsibility on investors to instruct their investment management companies to lean towards more sustainable and ethical investment options?
Greta Thunberg, the 16 year old climate change activist from Sweden, has consistently taken the headlines by storm in the last month, criticising world leaders for not taking extreme enough action to drastically cut our CO2 emissions.
If dramatic action isn’t taken now, within a decade we will have caused irreversible damage to the natural world and we will start to see the collapse of our societies. Scientists have estimated that if no changes are made, and our CO2 emissions continue to increase, we will hit 1.5 degrees global warming between 2040 and 2050. Once that happens, it will become incredibly difficult for us to maintain our agriculture, and safe drinking water will become harder and harder to source.
So, what changes can we make?
By shifting from fossil fuels to sustainable energy sources, we can begin to reverse the damage, and there are an increasing number of options available for investors to put their money behind investments that support this change.
Figures show that responsible investors are beginning to favour funds such as ESG, with ESG assets more than doubling in 2019. The term ESG was first coined in 2005, representing Environmental, Social and Governance.
ESG factors cover a wide spectrum of issues that, while they do have financial relevance, traditionally are not part of financial analysis. This might include how corporations manage their supply chains, their water usage and how they respond to climate change and environmental impact issues.
So, with ethical and sustainable investment options becoming more widely available, we have to wonder what changes we can make today, in a bid to protect our future.
