The case for sustainable investment
“There are risks and costs to a program of action, but they are far less than the long-range risks and costs of comfortable inaction.” John F. Kennedy.
Socially responsible investment decisions, it seems, now have a industry standard – environmental, social and corporate governance (ESG). In short, ESG is about whether the company does the right thing by the planet, community and its own people.
It seems like a far-removed and a rich people question – what to do with your investment – but in reality, everyone has the reins. Institutional investors, like pension (superannuation) funds, represent a massive share of the capital. So everyone (speaking of Australia) has some sort of investment and respectively the option to decide where these investments are going – and they should be going towards ESG-driving companies. It’s a decision that’s easy to implement, and in my opinion is the very basic step everyone, who considers themselves caring for the future and for the planet in any way, should take (or even those who don’t – because it’s not just about good citizen goodwill, it’s about sound busines sense).
The TED video below sums up the case for ESG in 12 eloquent minutes – very convincingly showing that there are no financial performance downsides to ESG investment; only upsides.
My super fund (Sunsuper) has the ethical investment option on par with balanced, high risk etc. If yours doesn’t, you should probably ask why and whether the fund is acting in your long-term interests. And consider moving. Because, as Mark Twain said:
“Plan for the future, because that’s where you’re going to spend the rest of your life.”