18 May 2020

Shaping a better future: ethical investing as a catalyst for change

Ethical investing has the power to shape a better future by serving as a catalyst for change in business practices. Let's explore the potential of ethical investments to drive systemic change, influence company behaviour, and promote greater sustainability.

Ethical Investing also known as socially responsible investing (SRI) or sustainable investing goes beyond traditional financial considerations. It involves making investment decisions based on not only financial returns but also ethical, social and environment factors. Ethical investors seek to align their investments with their personal values and principles, focusing on companies that demonstrate a commitment to sustainability, responsible practices and positive societal impact. 

Driving Systemic Change

Ethical investing has the potential to drive systemic change by redirecting capital towards companies that prioritise sustainability, responsibility, and ethical practices. By actively investing in these companies, individuals and institutions can send a a strong signal to the market, encouraging more businesses to adopt ethical principles and integrate sustainability into their operations. This collective effort can lead to a shift in business norms and practices on a broader scale. 


Influencing Corporate Behaviour

Ethical investments provide investors with the opportunity to influence corporate behaviour by engaging with companies and exercising their shareholder rights. Shareholder activism and proxy voting allow investors to voice their concerns, advocate for change, and hold companies accountable for their actions. By using their influence and voting power, investors can push for greater transparency, responsible governance, and sustainable practices within the companies they invest in. 

Promoting Greater Sustainability

Ethical investments play a crucial role in promoting greater sustainability across industries. By supporting companies that prioritise environmental stewardship, resource efficiency, and social responsibility, investors contribute to the advancement of sustainable practices and the reduction of negative environmental and social impacts. These investments can drive innovation, encourage the adoption of clean technologies, and promote responsible supply chains, ultimately leading to a more sustainable and resilient economy.

Practical Tips and Resources for Ethical Investing

1. Research and due diligence: conduct research on companies and investment options to ensure alignment with your ethical values. Look for certifications, ESG ratings, and sustainability reports to assess a company’s commitment to responsible practices. 

2. Seek professional guidance: consult with a financial advisor or investment professional with expertise in ethical investing. They can help you navigate the landscape, identify suitable investment opportunities and provide insights into industry trends and best practices. 

3. Use ethical investment tools and platforms: utilise online platforms and tools that specialise in ethical investing. These resources provide information, screening tools, and portfolio analysis to assist in making informed investment decisions aligned with your values. 

4. Engage with companies: as a shareholder, engage with companies on sustainability and social responsibility issues. Attend shareholder meetings, submit questions, and participate in dialogues to encourage transparency and positive change.

5. Support ethical investment funds: consider investing in mutual funds or exchange-traded funds (ETFs) that specifically focus on ethical investing. These funds are managed by professionals who conduct rigorous screening and selection processes to ensure investments align with ethical principles. 

Disclaimer: The information provided in this blog is for educational purposes only and should not be considered as financial advice. Ethical investing involves risks, and individuals should conduct thorough research and consult with a qualified financial advisor before making investment decisions.