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Sustainable investment: the basics

Sustainable investment, also known as socially responsible, green or ethical, describes an investment strategy that seeks to maximise environmental, social and financial gains. It’s about people, planet and prosperity.

In general, sustainable investors favour companies that promote environmental stewardship, consumer protection, human rights, and diversity.

Some (but not all) avoid businesses involved in alcohol, tobacco, gambling, weapons, and/or the military. The areas of concern recognised by the sustainable and responsible investment (SRI) industry can be summarised as environment, social and governance (ESG).

It’s not all about avoiding the bad guys

Investing positively in companies that are providing solutions to some of the most urgent sustainability challenges – often called impact investment – has been a major trend in recent years. Renewable energy, clean technology and sustainable agriculture, forestry and fishing are just some of the areas that investors are looking at.

Whether you’re investing in companies that are ‘doing good’ or simply screening out those companies that are doing the most harm, there is a sustainable investment strategy with your name on it.

Do not be afraid to ask questions about what companies make up a fund. And be sure to use the tool below to find a specialist ethical financial adviser near you, and an ethical fund that matches your aims.