If you’ve been looking for ways to invest that align with your values, you may have heard about something called “ESG investing.” ESG stands for Environmental, Social, and Governance. In short, it’s an approach to investing that takes into account the environmental and social impact of a company in addition to its financial performance. It’s a great way to put your money where your mouth is and help make sure that the companies you are supporting are ones that are doing good in the world. Let’s dive deeper into ESG investing and what it can mean for you.
At its core, ESG investing is all about understanding how companies behave when it comes to their environmental and social impact. This means looking at things like how they treat their employees, if they pay a living wage, if they support diversity initiatives, or if they use energy-efficient practices.
By taking these factors into consideration when making an investment decision, you can help to ensure that your money is going towards companies that prioritize sustainability and ethical behavior.
One of the main benefits of ESG investing is that it gives investors the opportunity to invest in companies that align with their values—whether those values are related to the environment or social justice issues such as diversity or gender equality.
Additionally, with more companies focusing on sustainability initiatives, there has been an increase in demand for “green” products and services—which can lead to better financial returns for investors who choose to invest in sustainable businesses. Finally, by supporting businesses whose operations are eco-friendly or socially responsible, you can help create a positive change in corporate culture which will benefit everyone in the long run.
As climate change continues to alter how the world functions, it’s more acutely felt by the world’s most vulnerable populations: women and girls. Poverty and increased violence are just a couple of the ripple effects that women are dealing with at a higher rate than men.
In a 2022 Financial Wellness Survey conducted by Ellevest, 62% of women indicated they’re concerned about climate change. In fact, “more women ranked it as a top financial concern above retirement planning (51%), credit card debt (46%), stock market (38%), and childcare costs (30%).”
What’s exciting about the emergence of ESG investing is that we can now take into account your values as an investor AND your long-term financial goals to create a plan that is the best fit for YOU.
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