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Businesses, organizations, and individual investors are increasingly considering the impact of their financial resources on the environment as well as socioeconomic struggles. As a result, there has been an increased emphasis on so-called sustainable investing in recent years. For anyone who is not familiar with the concept or its potential impact, a broad overview is outlined below.

What Is Sustainable Investing?

The basic definition of this concept is an investment opportunity that takes into account its inherent impact on the environment, marginalized groups, and other social concerns. Among the most prominent forms of sustainable investing is the increasingly robust realm of renewable energy. Many firms are prioritizing wind, solar, and other green energy sources as excellent fields for those interested in investing their money as ethically as possible.

What Does It Offer Investors?

In addition to the peace of mind that comes with knowing that an investment is not causing undue harm to the environment and society, there are other potential benefits that come along with sustainable investing. For starters, the return on investment has generally been as good as or better than Wall Street trades in general, so there does not seem to be any financial incentive to eschew this strategy. Furthermore, the most sustainable investments in the market tended to outperform the overall stock market when the economy crashed amid the COVID-19 pandemic.

Are There Similar Investment Strategies?

Although many companies have adopted what they refer to as sustainable investing programs, other entities might have a different name for a very similar outlook on the market. Terms such as impact investing and ESG, which stands for Environmental, Social, and Governance, have become ubiquitous in the modern finance industry. The bottom line is that each of these strategies prioritizes the effect each investment will have on the future of the planet and society.

Although the overarching goal remains the same, different plans accomplish their objectives in a variety of ways. Some actively include eco-friendly companies, while others go out of their way to curtail any investments in objectionable firms. The best strategy might take some cues from across the spectrum.