Learn how investing in shares for the greater good can improve your physical, mental and financial wellbeing.
When you think about investing in shares, you might think the best opportunities are within large global conglomerates or anonymous startups with big growth plans that may or may not be good for the planet, or the people in it. But what if you could invest for growth and for good, at the same time?
Conscious investing can have long term growth potential
Companies are given an ESG (Environmental, Social, and Corporate Governance) score which rates their degree of focus and impact on environment, social welfare and ensuring they are governed properly. Some call this a rating of the company’s “collective conscientiousness”.
Investors who use ESG ratings when considering whether to invest in a company, can gain a greater understanding of whether the investment aligns with their long-term priorities.
Demand for ESG-oriented products and services is rising. With global leaders being challenged to commit to carbon footprint reduction, companies are turning their sights to how their employees, partners and clients can collaborate to support the wellbeing of customers, their families, broader communities, and the planet.
According to Bloomberg intelligence1 (July 2021), “Global ESG assets are on track to exceed $50 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management.”
KPMG’s Responsible Investment Benchmark Report (Sept 2021) shows “responsible investment funds (RI) are just as resilient as non-RI funds. Approaching investment responsibly does not mean a loss in performance.”
How investing for good can impact your overall wellbeing
So, what if you could invest for growth and improve your wellbeing at the same time? And how do we define health and wellbeing? The World Health Organization (WHO) defines health as “complete physical, mental, and social well-being (and not merely the absence of disease or infirmity)2. “
While there are many different definitions of wellbeing, the WHO notes the primary indicator of wellbeing has been material wealth.
Interestingly, evidence is increasing on the role of subjective wellbeing indicators, such as subjective financial wellbeing (how you feel about your finances). Investing and actively engaging in companies that integrate ESG factors enables sustainable consumption via increased availability of sustainable products and services.
So, your investment strategy has the potential for a dual benefit of improving your wellbeing, while championing positive change!
6 ways to invest for good and wellbeing
Here are six ways to start your journey towards investing for good:
- Consider what’s important to you – what aspects of environmental or social impact do you want to play a part in, through your investments
- Start early – you don’t need a lot of money to invest, it’s time in the market that’s important. You’ll feel empowered knowing you’ve taken steps to grow your wealth and help the world at the same time.
- Do your research – Check ESG ratings and reports to see which companies are ESG champions and what’s their potential?
- Check your super – are sustainable investments considered?
- Review your goals and objectives and make sure your investment strategy is aligned.
- Talk to a financial planner. Talking to a financial planner can help you understand ESG investments and how they may relate to your situation so that you can make confident financial decisions (big or small) and get the most out of life.
