Sustainable investment is a crucial step in driving change on complex issues such as carbon emissions and living wages. It allows people to invest based on their personal values and priorities, and has the potential to generate returns that exceed market benchmarks. Studies have shown that sales of sustainably marketed products are overrepresented, representing more than 50% of market growth, while only representing less than 17% of market share. This indicates that consumers are more likely to purchase products from companies that prioritize sustainability.
Internally, sustainability is just as important as it is for external stakeholders. Companies that prioritize sustainability are more likely to attract and retain talent, as well as increase employee engagement. A study conducted by the Center for Sustainable Business at New York University Stern found that employees who feel they are doing meaningful work are 57% more productive and 87% less likely to quit. Sustainable investment also offers a wealth of opportunities for economic and profit growth.
Clean water and sanitation, innovations in energy generation and distribution, improved health care and more efficient transportation are just some of the areas where sustainable investments can be made. During periods of high market volatility, sustainable funds have generally proved to be more stable investments. Wealth and asset managers have experienced a significant influx of client funds that are earmarked for sustainable investments. Millennials are increasingly aware of global inequalities such as climate risk, global hunger, poverty and access to health care, which has driven demand for sustainable investments.
Companies that have not yet invested in their sustainability will need to adapt in order to survive. Providing sustainable investment opportunities allows companies not only to obtain financial returns for customers, but also to obtain intrinsic returns that are not replicated elsewhere. Success in adopting sustainable investment will be measured by how quickly companies offer strong offerings to target customer segments.
