How can your finances help our planet?
While awareness days such as Earth Day are an excellent way of increasing involvement and getting people thinking, there is more we can all do to help our planet year-round. Given this year’s Earth Day theme of ‘Invest in our planet’, now is a great time to think about how your finances can play a part.
There has been a considerable rise in the awareness and support of Environmental, Social and Governance (ESG) issues in recent years, and responsible investment has grown in popularity as more people have started to prioritise ESG factors in their investments.
If you are interested in the merits of responsible investment, it is important you take care to properly understand what it is you are really investing in. Doing the research will help give you the confidence to make informed decisions. Your financial adviser is best placed to help you explore your options and make suitable choices for your personal circumstances and preferences.
When considering responsible investment, it is important you are mindful of ‘greenwashing’ – the attempt to capitalise on the growing demand for environmentally friendly products. A genuine ‘green’ investment will incorporate factors from the ESG criteria that sits at the heart of responsible investment, whereas a ‘greenwashed’ investment may falsely claim to do so, for example by focusing on ‘green’ projects to create a false impression and detract attention away from less eco-friendly ventures.
For more information on ‘greenwashing’ and the things you should consider, read our article.
As with all investing, your capital is at risk. The value of investments and the income from them can go down as well as up and investors may not get back all of the amount originally invested.