What is Ethical Investing?
Have you ever thought about putting your money to good use? Some people can find the world of investing intimidating and aren’t sure what their investment is actually funding. With so much industry jargon and many aspects to consider, it’s no surprise that many people have yet to start investing. However, today might be the right day for you to consider ethical investing.
You can get closer to your first investment by talking to an authorised financial adviser about your money and financial goals. Having a clear picture of what you want to work towards can assist you in determining how much money you should set aside for your first investment. Get started by reading the information about ethical investment below.
Ethical Investment in Australia
Sustainable and responsible investing are other terms for ethical investing, which is gaining popularity among Australians. According to the Responsible Investment Association Australasia, four out of five Australians believe that environmental concerns are critical when making financial decisions.
Along with this, 70 per cent of Australians believe that environmental issues such as fossil fuels, environmental deterioration, and pesticides should be avoided. Many people are also concerned about animal cruelty, cigarettes, human rights violations, gambling, firearms, and weaponry.
As we move forward, Australians are more cautious with their investments, and also want to make financially sound judgments to avoid missing out on potential profits.
Exploring the Various Types of Ethical Investing in Australia
ESG integration, negative screening, positive screening, and impact investing are the most common approaches to ethical investing.
Negative screening is the process of excluding industries that you don’t want to promote, such as tobacco, alcohol, animal cruelty, gambling, fossil fuel companies, etc.
Positive screening indicates that you seek out companies that operate in industries that are in line with your morals and values. These businesses support ethical practices, usually working in renewable energy (i.e. solar panels, windmills, and green energy), education, and even healthcare.
Before investing, ESG integration takes into account numerous environmental, social, and governance factors.
Finally, impact investing focuses on businesses that solve global concerns and have a social, cultural, and environmental impact. It fosters a healthy and socially responsible outlook on creating and growing wealth.
Choosing among Different Ethical Investments
There are multiple ways that you can invest ethically, including super funds, ETFs, and shares. Your financial adviser can guide you to select investment vehicles that offer opportunities for ethical and sustainable investing. Since most firms have established sustainable portfolios and sustainable shares, there are many options in the market to choose from.
Deciding on Your Ethical Investments
You’ll want to narrow down your selections and support companies you care about and believe in – you may also want to list the industries you want to avoid.
Carefully evaluate their market performance when making an investment decision because you’ll want to make sure you earn decent returns in the future to help you achieve your financial goals. Apart from their results, you should look at their investment fees to see if they are reasonable.
When it comes to investing, it’s best to obtain advice from a financial adviser so that you are confident that you’re making the best financial decisions for your circumstances and that the investment you’re making will provide you with adequate returns.
Ready to start an Ethically Invested Portfolio?
Investing can be a daunting task. When you identify companies that you believe in and wish to invest in, you’re helping your future self, future generations and funding companies dedicated to making the world a better place to live.
Naturally, there are numerous factors to consider before investing. That’s why working with a reputable financial adviser to ensure you’re prepared for the future is recommended.
If you need investment advice as you begin your journey in ethical investing, you can trust the guidance of the expert financial advisers at Central Coast Financial Planning Group. We have the knowledge and experience to manage your investments and assist you in making sound financial decisions. Contact us today to book your complimentary first meeting!
DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
