What Is Sustainable Investing And Why Is It Important?
10 July 2023
Investors are always looking for opportunities to further build and diversify their portfolios. Today, there are numerous strategies they can leverage to achieve this goal, with sustainable investing being one such emerging trend that is changing how they think and approach this endeavour.
The concept of sustainable investing contributes to positive social changes, which, in turn, helps shape our world immensely. It is proven that individuals and even organizations can financially benefit by opting for these types of investments. By reinforcing sustainable business strategies, businesses and their purpose-driven leaders thrive and solve today’s greatest challenges.
Read on to better understand sustainable investing and how it can help improve your diversified portfolio and society.
What is Sustainable Investing?
Sustainable investing is a set of practices wherein investors aim to gain financial returns while promoting long-term social or environmental value. This approach of combining environmental, social, and corporate governance (ESG) insights with traditional investment has led investors to generate more comprehensive analyses and make smarter investment decisions.
Sustainable investing ensures investors and firms are judged from a broader picture of how and what they contribute to society rather than solely on short-term financial gains. In other words, investors must think critically about the potential impact of their investment ventures as they relate to societal, environmental, and political landscapes.
What Makes Sustainable Investing Important?
The rising popularity of sustainable investing is due to the demand from impact investors and millennials concerned with ethical investing or the investment strategy of financially supporting organizations with intrinsic values that drive change and positively impact the world.
Sustainable investing prompts businesses to embrace and prioritize sustainable principles that provide both financial and long-term social gains. This concept is embodied in the idea that, apart from focusing on generating profit and improving financial performance, companies should also measure their environmental and social impacts, often referred to as the triple bottom line.
Encouraging the mass adoption of sustainability practices among businesses promotes the increase of purpose-driven organizations that go beyond just selling products or services and make positive social and environmental impacts. Moreover, these sustainable business strategies often play a role in solving large-scale global issues like climate change.
As such, investors need to start with sustainable investing and become familiar with the best practices to determine when and where to invest according to their values and prevailing investing trends. It is important to note that investing sustainably does not mean losing or forfeiting financial returns. Although there is no guarantee of returns, ESG investments and funds do just as well and even outperform their non-ESG counterparts.
For instance, 14 out of 17 ESG-focused exchange-traded funds (ETFs) surpassed the S&P 500 from January to May back in 2020. According to Morningstar, 23 new ESG funds were also launched in the same year. These new launches provided more sustainable choices to investors and indirectly encouraged companies to re-examine their ESG scores.
How The Reserve Supports ESG Initiatives
The building of The Reserve has support for ESG initiatives in mind. Rather than to construct a new building from its foundations, we are upcycling an existing facility to cut down on polluting construction emissions.
For our electrical needs, we switched from the original building’s high-tension line to a low-tension line for power transmission to reduce The Reserve’s electrical consumption.
Given Singapore’s sunny weather, we are installing about 280 kilowatts of solar panels on the building’s roof to tap into this renewable energy source. The energy generated from these solar panels will be more than sufficient to power the façade’s lighting.
In addition, The Reserve’s double façade acts like an effective sunscreen to reduce the building’s internal heat, reducing air condition usage within the building. Moreover, the onyx façade also allows refracted daylight into the building, further reducing the energy used in internal lighting.
The Reserve is proof that sustainable practices don’t have to compromise on premium and quality services while preserving security all the way.
Sustainable investing is set to grow in popularity as more investors become aware of how their investments hinder or further the causes they deeply care about. Likewise, companies that wish to attract new investment and gain positive press coverage will be pressured to improve their ESG scores.
If you are searching for a secure place to store your wealth with a commitment to ESG initiatives, The Reserve has got you covered. We are slated to be the world’s highest capacity vault, a safe space to store generational wealth. Our high-security gold and silver vaults in Singapore can accommodate not just precious metals but all manner of valuables befitting your needs.
For more details about services, don’t hesitate to send us an inquiry today.