From time immemorial, investment has always been about making profits alone, but in recent years, we've seen a change, one where values align with portfolios and profits merge with purpose. That shift is ESG investing, where environmental, social, and governance factors take center stage alongside financial returns.
And guess what? It's not just about doing good; it's about generating positive gains while making a meaningful impact on society and the environment.
Factors like climate change, social responsibility, and ethical governance have taken more prominence in investors' minds. And as more investors embrace this approach, the impact reverberates across industries.
Take the recent boom in ESG investing. In the wake of the COVID19 pandemic, investors sought resilience, turning to ESG funds for stability. The result?
A staggering $45.6B flowed into these funds in just three months. And the momentum has stayed strong; sustainable investment funds now hold $30.7 trillion globally, with projections soaring even higher in the next two decades.
In fact, roughly $30.7T currently sits in sustainable investment funds worldwide, and it is predicted this could rise to around $50T in the next two decades.
But why the sudden surge? It's a mix of factors, really.
Supply chains are growing more complex, raising awareness of social and human rights issues. Concerns about climate change are mounting, shaping investor decisions. Plus, there's a changing demographic in the investor pool—more young people and women are getting involved, bringing fresh perspectives and priorities to the table.
All of this means businesses that are slow to adapt may find themselves facing criticism and pressure from stakeholders and investors. Legal obligations are tightening, too, with courts demanding action on climate_change and shareholders pushing for accountability.
But here's the catch: ESG issues aren't only shaping how investors evaluate companies; they are also enabling organizations that embrace these issues to attract a new wave of investors seeking both financial returns and social impact.
But how can your organization seize this opportunity?
Expert analysts and coaches at Enventure can help with ESG principles, setting robust targets, and measuring performance transparently to take advantage of this wave fully. Remember, ESG isn't just a trend; it's a transformation. And by embracing it, you're not just investing in the future—you're shaping it for the better.
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April 18, 2024