3. Is ESG A Good Investment?
Last Updated: September 27, 2022
Investing with your values in mind is natural – intuitively, people don’t want to use their money to support people or businesses that cause harm. But financial security is important too. So when people think of investing with environmental, social, and governance (ESG) factors in mind, they are right to ask: is ESG a good investment?
The short answer is yes. The COVID-19 pandemic gave us all a window into why. COVID was a health crisis, but we watched it hurt the financial markets too. Interestingly, companies that showed a commitment to sustainability were among the leading performers in the depths of the crisis.
This period of time highlighted why investing in companies that strive for and pursue ESG goals is essential. It doesn’t have to be one or the other––your investments can thrive, and communities can prosper, because ESG is a good investment. Here’s why.
ESG Investing is a Hot Topic, But Not a New One
Let’s be clear: ESG investing is not a fad that means going green at all costs. Instead, it is an established, measured, reasonable investment strategy focused on long-term investment results.
Today, we are faced with more and more breaking news about our world’s sustainability challenges, like inequality, climate change, and environmental hazards. We can help quality companies employ people where economic growth is needed. We can lend our dollars to entities where animal testing is not a thing and will never be a thing. We can invest in a green future.
You can––and should––mix your ethics and your investments, and feel good about doing so.
ESG – It’s Called Sustainable for a Reason
Investing with ESG principles in mind is often called sustainable investing, in part because it’s meant to focus on sustainable approaches to working with people and planet. But it turns out that company performance also becomes more sustainable when ESG is in play.
Studies of ESG companies, and of investment strategies that focus on them, consistently show that they hold their value better during difficult times. Generally speaking, people are just more confident that sustainable companies will survive when times are tough, and recover faster when conditions improve.
Importantly, ESG investing won’t spare you from short-term market drama. These stocks will go up. They’ll go down. That’s the name of the short-term game.
But over time, sustainable companies set themselves up for success by identifying things that have lasting value. And they win lasting fans. Isn’t that what you’re investing for – long-term financial security? This is exactly what investors need: companies trying to create durable value that will support you into retirement, the Golden Years, and beyond.
And isn’t it great knowing your dollars have the potential to determine a better tomorrow? You can put your money where your values are.
ESG Isn’t Going Anywhere
Sustainable business practices are here to stay because companies see them as a competitive advantage in a rapidly changing world.
For example, lots of ESG investors want to move away from fossil fuels and the rush toward renewable energy. We want a cleaner world that includes caring companies that treat workers well and exude environmental stewardship. ESG business leaders want this too, but for sound financial reasons. Fossil fuels are only going to become more expensive. The costs of adapting to climate change could be massive. There’s a competition for talent, and unhappy employees don’t help you win.
Embrace ESG because––thankfully––it’s not going anywhere.
Till sees ESG as a huge opportunity. Investing your values is achievable, accessible, and actionable. Let’s connect because we’d love to speak with you about cultivating a better tomorrow that aligns with your purpose and portfolio. Have a group of like-minded friends? Even better, because the more the merrier.