How to start with impact investing
According to the Global Impact Investing Network, Impact Investments are investments that generate social or environmental impact that is positive and measurable, in addition to a financial return. You can do impact investing in various styles:
Negative screening. ❌ Avoid sin companies in your investments. These companies typically operate in industries such as oil 🛢 firearms 🔫 tobacco 🚬 and gambling 🎰.
Stock picking. ✅ Direct Investments in companies of your choice. Sustainability ratings such as the one from Sustainalytics serve as a good indicator of which company you want to invest in.
Invest into funds that hold a portfolio of different firms with good rankings according to your values. 🤟 If the energy transition is your passion, you may consider investing in a Global Clean Energy ETF ⚡️
Two key terms exist in the impact investing world: ESG and SRI. But don’t worry, we got you covered. ✌🏻
ESG refers to the Environmental 🌱 Social 🛖 and Governance 👩🏻⚖️ practices of an investment that may have a material impact on the performance of that investment. ESG factors are integrated with traditional financial analysis, but the focus remains on financial return. 📈
Socially responsible investing (SRI) goes one step further than ESG investing by actively eliminating or selecting investments according to specific ethical guidelines. ❌
So what are you waiting for? Go find some investments that make an impact on the world and apply them to your financial goals. Be the movement – make!mpact 💞
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