The Rise and Rise of Conscious Investing

Investing has always been a great way to generate wealth and secure our financial future. Yet the world is growing closer and information is more accessible. It’s clear that investing has an impact far beyond financial returns.

Investors are realising their role in shaping an ideal future and their ability to enact positive change.  

What is conscious investing?

Conscious investing, also known as responsible investing, ethical investing, sustainable investing, or socially responsible investing (SRI), is a strategy that endeavours to generate not only financial returns, but positive social or environmental impact. In other words, it’s about investing with a higher purpose beyond making money.

This can take on different forms:

– Some investors might decide not to invest in businesses that harm society or the environment.

– Investors may choose to avoid companies that seem unethical. Examples include those involved in gambling, tobacco or firearms.

– Some investors make an effort to invest only in companies that benefit society. They can include those involved in renewable energy, healthcare, low carbon emissions, affordable housing, and other similar fields

When people care about certain issues, they can choose to invest their money in companies that support those same values. This is called conscious investing, and it can make people feel good about where their money is going. It might even encourage more people to start investing because they know their money is making a positive difference.

Conscious investing can also be a driver of positive change in the world. By investing in companies that support things like sustainability and helping people in third world countries, investors can make a difference. It can also send a message to companies that they need to care about more than making money. This generation cares about social and environmental issues and so investing in companies that share those values is one way to make a statement.

But here’s the kicker… conscious investing can also be good for business. In fact, companies that make social and environmental responsibility part of their day-to-day practices are tending to outperform their peers over the medium to long term

What are your options?

At the end of the day, the drive to partake in the conscious investing revolution all comes down to your priorities and values And for those who are wanting to focus in this area, the opportunities for ethical investing are there already.

There are several managed funds and ETF’s that are purposefully designed for conscious investors.  They will only invest in companies with positive social and environmental outcomes. There are also funds that will focus on not holding companies that are seen as harmful in their portfolios. These funds can be accessed by most investors as a practical way to invest according to their personal values.

Investors can also seek out these companies themselves by researching and evaluating their impact, although this could be a time-consuming project.

Don’t forget – this style of investment can be established as a personal investment structure but can also be used for your retirement savings and superannuation.

The good news is that conscious investing no longer means sacrificing financial returns for your beliefs In fact, many companies with stronger social and environmental policies are also strong performers financially.

Where to now?

If the thought of conscious investing gets you excited, there are some steps you should consider before making the leap:

– Understand your personal motives for conscious investing. Make sure you are not following the latest trends.

– Seek advice from a professional investment adviser or financial planner.  They are in the best position to discuss the pro’s and con’s of conscious investing and offer an alternative point of view.

– Understand that the best financial plans are long term. Focus on this aspect for your portfolio and remember that all investing involves some form of risk.

Ready to start investing with purpose? Consider conscious investing and make a positive impact on the world while securing your financial future. If you’d like to speak to a professional investment adviser or financial planner, contact us at Collective Wealth Advisers, today.

 

  • Aaron Steer
  • Apr 19 2023
  • Wealth Creation & Investing
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