Michael Underhill, chief investment officer for Capital Innovations, challenges anyone who claims that sustainable and socially responsible investing is not a profitable endeavor. And as the world over gears up to mark the 45th Earth Day this week, it’s quite clear that he would win his case, because socially responsible investing has become the norm.
Today, more investors are keen to invest by Environmental, Social and Governance (ESG) standards. According to the Forum for Responsible and Sustainable Investment (SIF), assets into sustainable investing grew by $6.6 trillion between 2012 and 2014. Conventional investment firms are increasingly active in creating and marketing targeted products for sustainable investors (green bonds are commonplace now), and today, the organization states, interest in social, sustainable and impact investing attracts a wide array of different kinds of investors.
As it should, according to Underhill because he said the earth is increasingly pressed for resources. Many believe that climate change should be at the forefront of global policy making and as the world’s population continues to increase, the depletion of a finite supply of natural resources—water, food, energy—affects everyone, he said, investors included.
To that end, everyone has a duty toward preservation and the more money enters the sustainability universe, the more viable an investment destination it continues to become. This is particularly important given emerging market economies’ rapid growth rates, according to Underhill.
A couple of weeks ago, Saturna Capital, which has a long track record in serving faith-based investors and is a leader in Sharia-compliant investing, launched an equity and a bond fund dedicated to sustainable investing. The funds will be investing in the stocks and bonds of companies around the globe that exhibit superior environmental, social and governance standards, said Paul Meeks, manager of the Saturna Sustainable Equity Fund.
“If you believe the numbers, one out of every five or six dollars is invested according to some socially responsible investing (SRI) screen,” Meeks said, ”and those dollars are coming from a broad swath of investors, including endowments, foundations, institutional and individual investors. This is a huge and growing market.”