One of the hottest trends in investing today is Sustainable investing. But what does that actually mean? Well, let’s break it down. 

Sustainable Investing actually goes by a couple of names that you may have seen in the media before like Socially Responsible Investing, Ethical Investing, or ESG Investing, all usually there referring to the same thing. 

Sustainable investing involves investing in businesses that make the world a better place, by positively impacting areas like the environment and society, and avoiding areas - like fossil fuels and weapons manufacturing - that have a negative impact on our planet and society. It's an investing strategy that has skyrocketed in popularity over the past few years, which could be put down to several reasons like increased awareness of social justice issues, heightened media coverage of the environmental crisis or simply the fact that more people are wanting to lead sustainable lives. Either way, this long-standing notion of sacrificing your values for returns is pretty well dead in the water.

What are sustainable businesses?

So sustainable businesses can fall into one of the following groups:

• Group 1 includes businesses that have a positive impact on our world. A good example of this would be green tech, which focuses on utilizing solar panels or wind turbines to power businesses.

• Group 2 includes businesses that have a positive community impact. You’ve probably seen many companies employ community give-back programs like Cotton On or Rare Beauty.

• Group 3 are businesses that avoid bad practices involved in damaging our world and society like child labour or greenhouse gas emissions, two subjects that gather lots of public scrutiny.

How do you invest sustainably?

There are both simple and complex ways to invest sustainably. A simple path would be choosing an ETF or portfolio that has been created with the intention of being sustainable, meaning a fund manager has carefully crafted a culmination of stocks, bonds and other ETFs centred around a specific or broad ethos of sustainability. 

A little more complex variation would be you combing through the thousands of stocks out there with your own criteria for sustainable options, derived from some solid time researching. If you’re using a platform like us, there may even be options to select a renewable category in the explore section, or view the ESG impact of each company via a scoring system, to help you better navigate the large variety of options out there.  

^{Investing involves risk. You aren't guaranteed to make money, and you might lose the money you start with.}

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