In response to global warming, shifting demographics, and the technology revolution, social and environmental change is sweeping across the globe. As a doctor or dentist, you might be an avid investor, but have you ever evaluated how society and the environment impact your investing strategy?
This does not constitute advice and advice should be sought in all instances before acting on it.
Dental & Medical Financial Services accept no responsibility for the accuracy and functionality of linked-to third party websites.
According to Schroders Global Investor Study from 2019, 52% of respondents consider sustainable investment factors during their planning and 61% believe that individual investors can make a difference through their investment choices. Start 2024 on the right foot; learn more about sustainable investing to decide if it’s right for you.
What is sustainable investing?
Sustainable investing boils down to the understanding that investments can and should contribute positively to society and leave little impact on the environment, people, and our planet. Sustainable investing goes beyond traditional financial analysis; you must consider other non-financial factors such as Environmental, Social, and Governance (ESG) considerations and how they could potentially impact an investment’s ability to generate long-term returns.
Essentially, those practicing sustainable investing are preparing themselves and guarding against future risk while remaining open for future opportunities brought about by recognising the social and environmental impact of their investment choices. By taking a broader approach to investing, one should be able to generate more returns than those that take a shorter-term viewpoint.
Why is sustainable investing important?
Investing does not happen in a vacuum. There is no way around it: Social and environmental factors pose a risk to investments. Operating like this isn’t a fact that will be detrimental to your portfolio. In fact, many advisors even consider including ESG factors in their recommendations as part of their fiduciary duty.
Caring about the environment has become popular all over the world, with many societies and governments prioritising the environment more and more in recent years. It makes sense that on a micro level, individuals and investors are increasingly looking to invest in a way that reflects these personal values. Gone are the days when profits and returns are king — how a company operates is just as important as how much money it makes. This has caused investors to push for more from their investments such as transparency in reporting, a greater commitment to tackling social and environmental issues, and concrete evidence of their efforts.
Questions about sustainable investing
As it’s a new concept for many, you may have some questions about sustainable investing. One of investors’ biggest concerns is whether or not performance is sacrificed in the name of sustainable investing. We can unequivocally say that just because you participate in sustainable investing does not mean you will have to sacrifice financial success. Your goals will remain the same, it’s just that you may need to go a different route to get there. Of course, normal factors will still influence a company’s performance, but there have been many studies that show that there is a connection between responsibility factors and improved performance.
Another question to address is if investing sustainably is expensive. While it has historically been more expensive as it was seen as a niche area, currently there are more options available and pricing has become more competitive. In many cases, an ESG fund will cost the same as a traditional one.
Start investing sustainably today
The biggest benefit of embarking on a sustainable investing journey is that you can meet both your financial and sustainable investment objectives.
You will also feel more engaged and emotionally connected with your investments since they are a representation of your personal views. To learn more about sustainable investing, contact the experts at Dental & Medical Financial Services today.