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How ESG investments can reduce your carbon footprint
You might have read our recent look at ESG factors and the future of sustainable investing, in which we also announced the imminent arrival of our new ESG portfolios.
The article found that 65% of UK investors now see responsible investing as a priority.
As awareness grows of the impact of climate change and the effects of plastic pollution on the planet, finding ways to live a more eco-friendly life is increasingly important.
Reducing short-haul flights, switching to a plant-based diet, and changing to renewable sources of energy are clear ways to reduce our carbon footprint. The direct connection between helping the planet and the investment choices we make might be harder to spot.
That’s why a recent report has looked at just this.
Keep reading to find out about the role ESG investments can play in reducing your carbon footprint.
A £100,000 sustainable investment could save 64 tonnes of carbon
UK investors have trillions of pounds held with companies investing in a wide range of industries across the globe. £2.6 trillion is invested in pensions alone.
A new report from Make My Money Matter has looked at the difference you can help to make by investing your money in sustainable funds. The research found that investment choices make a huge difference to your carbon footprint.
According to the analysis, a pension pot of £100,000 invested in funds with a good track record on ESG (environmental, social and governance) factors could save 64 tonnes of carbon compared to a non-sustainable investment.
A £30,000 investment in ESG funds is equivalent to a difference of 19 tonnes of carbon a year. That makes sustainable investment approximately:
Make My Money Matter has launched the “21x Challenge”, designed to encourage UK savers to commit to using their money to help tackle climate change, by asking providers to go green and commit to net zero.
Moving an investment into greener funds was found to be 21 times more powerful – in terms of limiting your carbon footprint – than stopping flying, becoming a vegetarian, and moving to a renewable energy provider combined.
Your investments and ESG factors
Helping to protect the planet for future generations is important for all of us and it’s a responsibility that we at Boolers take seriously. That’s why we are introducing a new range of ESG portfolios to help you invest in a way that aligns with your values, helps the environment, and provides good returns.
ESG investments focus on three key areas.
Environment
Environmental factors might be the ones that immediately spring to mind when thinking about sustainable investing.
A company’s relationship with the environment – its carbon footprint and attitude toward sustainability, energy usage and pollution – is a key part of deciding its ESG credentials.
Social
Social factors consider a business’s place within its community.
Does it have adequate working conditions, a good record on human rights, and fair pay?
Over recent years, global events like the Black Lives Matter movement and high-profile pay scandals – such as the wage inequality scandals at the BBC – have ensured societal issues have taken centre stage.
This has made it more important than ever that our investments match our views in these important areas.
Governance
Governance factors will take into account the way a company is run. This could include the salaries of its highest-paid executives, involvement in political lobbying, or the election process for board members.
Combining all three elements of ESG investing gives you the best chance of knowing that your investments are supporting companies who act fairly to their employees and shareholders, while also taking their responsibility to the planet seriously.
Get in touch
Boolers’ newly developed ESG portfolios will provide you with the opportunity to align your investments to your values on governance, social and environmental issues and could help you to significantly reduce your carbon footprint.
Boolers are here to help you achieve your goals and manage your pensions and investments, so get in touch. If you would like to discuss any aspect of your financial plans, please contact us today.
Please note
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
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