It's no secret that environmental, social and governance (ESG) investing is on the rise. In fact, a recent study by Morgan Stanley found that sustainable investments now make up a staggering $30 trillion of the global investment market.
Despite this growth, there are still many skeptics out there who view ESG investing as nothing more than a fad or a way to score political points.
If you're looking to sell an ESG-minded Skeptic on the benefits of sustainable investing, here are a few key points to keep in mind:
1. Environmental and social issues are increasingly becoming financial ones.
A recent report by the World Economic Forum found that environmental and social risks are now the biggest threats to the global economy.
These risks include things like climate change, water scarcity and societal inequality. And as these issues continue to grow in magnitude, they are increasingly becoming financial ones as well.
In other words, environmental and social issues are no longer just "nice to haves" - they are now critical considerations for any business or investment decision.
2. ESG investing can actually boost financial performance.
A growing body of evidence suggests that companies with strong ESG credentials tend to outperform their less sustainable counterparts.
For example, a study by MSCI found that over a 10-year period, companies with strong ESG ratings delivered returns that were 2.5% higher than those of companies with weak ESG ratings.
3. ESG investing is no longer just for "tree huggers" and "bleeding hearts."
It's true that sustainable investing used to be the domain of socially-conscious individuals and institutions.
But times have changed, and ESG investing is now mainstream. In fact, some of the world's largest investment firms - including Blackrock, Vanguard and Goldman Sachs - are all major players in the space.
4. You don't have to sacrifice financial returns to invest sustainably.
A common misconception about sustainable investing is that you have to sacrifice financial returns in order to achieve social or environmental impact.
This simply isn't true. As we've seen, companies with strong ESG credentials tend to outperform their less sustainable counterparts.
So, if you're looking to sell an ESG-skeptic on the benefits of sustainable investing, remember to highlight the financial imperative for doing so. Environmental and social issues are increasingly becoming financial ones, and companies that don't address them risk being left behind.
At the same time, don't sacrifice returns in the name of sustainability - there's simply no need to do so. esg investing can actually boost financial performance.
5. Sustainability is good for business - and society.
Investing in sustainability isn't just good for the environment and society - it's also good for business.
That's because sustainable businesses are typically more efficient, have lower risks and are better able to attract and retain top talent.
What's more, sustainable businesses are often at the forefront of innovation, which gives them a competitive advantage in the marketplace.
So, if you're looking to sell an ESG-skeptic on the benefits of sustainable investing, remember to highlight the business case for doing so. Sustainability is good for business - and society.
