David Blood, co-founder and senior partner at Generation Investment Management, spoke at the Bloomberg Sustainable Business Summit and tackled the topic of what IS sustainable investing?
Blood says all the jargon and acronyms can create quite a challenge when developing a sustainable investing philosophy because initially, investors might not understand it.
Breaking it down for investors and helping them understand the distinctions is the first step.
Deciphering the terminology
Impact investing can be confusing for some, one would expect that all investments have some type of impact right? Blood explains that yes, investments do have an impact but you have to take it a step further and look at was the impact intended? How can it be measured? Are you willing to increase risk or possibly see lower returns in order to make that impact?
Socially Responsible Investing (SRI)
Blood points out that SRI, sustainable investing and ESG investing all get lumped together but they shouldn’t.
SRI is more exclusion based – companies or products (such as alcohol or tobacco) that investors disagree with are avoided.
ESG (Environmental Social Governance)
ESG criteria are standards investors look at to screen a particular company for potential investment.
Blood went on to discuss the framework his organization uses that is rooted in sustainable investing and based on long-term investing.
You can learn more about it by reading the full article, The mainstream advancement of sustainable investing.
Looking for more? Check out our Socially Responsible Investing blog for more ideas and information.