TSI #35: Should you care about sustainable investments (ESG)?
Feb 26, 2023Hello Stoic Investors,
Today I want to focus on the future. Your future.
You’re probably well aware that our planet is strongly impacted by global warming.
Have you perhaps noticed how the summers keep getting hotter?
I have.
Therefore, I’d like to introduce something called ESG investing.
What is it?
ESG investing stands for Environmental, Social, and Governance investing.
It is an investment strategy that focuses on investing in companies that have strong environmental, social, and governance practices.
This is a trend that is becoming increasingly popular. At present, 29 countries and territories maintain some degree of mandatory ESG disclosure regulation.
Before you ask, I know what you’re thinking.
Will I have to give up financial results to be an ESG investor?
Absolutely not.
ESG investing aims to create a positive impact on society and the environment while also achieving financial returns.
Those who practice ESG investing believe that companies with strong ESG practices are more likely to be sustainable in the long term and will perform better financially.
It does make a lot of sense.
In case you’re curious...
How do I find ESG investments?
ESG investing can be done through various types of investment vehicles, such as mutual funds, exchange-traded funds (ETFs), and separately managed accounts.
Vanguard already has an ETF for this: Vanguard ESG U.S. Stock ETF ($ESGV).
If you prefer to choose individual stocks, there are also rating agencies that provide information on a company's ESG performance.
You can use that to find companies that are willing to make the world a better place.
For example, if you invest in a company that focuses on renewable energy, you can support the development and deployment of clean energy sources.
As a result, you’ll be able to grow your portfolio while knowing you’re also making a change.
So, note down these points and start investing today:
- ESG is becoming increasingly popular
- Investing in ESG doesn’t mean you have to sacrifice your returns
