ESG investing – A Bluedot Environmental Perspective

Living a sustainable lifestyle and being environmentally friendly goes much further than just recycling papers and plastics or using reusable bags at the grocery store.

Living a sustainable lifestyle and being environmentally friendly goes much further than just recycling papers and plastics or using reusable bags at the grocery store. Your personal efforts help a great deal; however, those individual impacts are on such a small scale. When we think about slowing climate change or reducing the pollutants in our atmosphere, we need to think about what is causing most of the problem. There is one answer – large corporations. Only 100 companies are responsible for over 70% of the world’s pollution.

 

How can we as individuals make a difference here?

 

When everyone consciously participates, we will have the strongest positive impact on the environment. One way we can do this is by directing our investments into supporting only those environmentally friendly companies that are making a sustainable difference for the planet.

 

I know, the words sustainable and investing may not sound like they go together. However, the fact is that large polluter companies, no matter how much they pollute, will continue to degrade the environment as long as they are making money, and a lot of that profit comes from investments in the stock market. The longer we invest money in environmentally destructive companies, the longer they will ignore policy changes and continue their detrimental practices.

 

Although we may not have much control over multi-billion-dollar companies, our investments are one of the few things we can control, and it can trigger the right policy change and action that needs to happen to save the planet.

 

ESG investing is a sustainable, eco-friendly route for investing.

 

The three criteria that each company is graded on to be considered an ESG investment are environmental, social, and governance. These prescreening criteria make it much easier to recognize which companies are actually making a difference for the planet.

 

Environmentally, the company must have significantly reduced environmental impact or environmental risk regarding energy usage, wastewater, pollution, resource management, and wildlife conservation.

 

Socially, the ESG criteria look at the company or business values, whether they encourage local community engagement, the safety of the workplace, and the interest of their stakeholders.

 

Finally, governance refers to the accuracy and transparency of a company when reporting about issues or conflicts. When put together and held at a high standard, the ESG criteria can easily weed out companies that are unsustainable for the environment and their employees.

 

ESG investment opportunities are one of the fastest-growing investment sectors in the stock market. With these companies, you can be assured that your money is doing better for you and the environment.

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