1. An investment in an enterprise that follows a green, sustainable approach to its business activities.
2. An investment in an enterprise whose prime objective is to create a positive impact on the world by, for example, preventing climate change or supporting the fight against food poverty and social injustice.
We live in a world of constant flux. While this can be stressful, it's also exciting because it means that there are always new opportunities to be found.
In this day and age of climate change, human rights violations and other social injustices, and with ethics and sustainability never having been higher on the world's social agenda, the shift from traditional investing towards ethical investing is continuing to gather momentum. Numerous major corporations including banks and supermarkets have accordingly changed their business practices to become more environmentally-aware.
a) financial returns: this means that the investment needs to generate sufficient income to cover costs and provide a return on capital.
b) social and/or environmental returns: this means that the investment has to create a positive social and/or environmental impact as well.
There are many different ways to invest ethically. From putting your money into bonds or stocks, to getting involved in a direct investment in a company with a green mission; there are a lot of options out there for anyone who wants to make ethical choices about their money.
For example you could invest in funds that incorporate positive ethical or values-based screening processes, or even choose sustainable and responsible investment (SRI) funds, which place emphasis on ethical, social and environmental good. There are also ESG investing strategies, which take into account environmental, social and governance risks and opportunities.
With so many ethical investment products to choose from, it is somewhat surprising that many investors with ethical aspirations often choose not to do anything at all. Some think that choosing an ethical fund is too complicated, whilst others cannot remember the names of companies that make sustainable products.
In short - YES. There is a misconception that ethical investments are a poor financial choice, but this is most definitely not the case. Some well-established ethical funds now have several decades of sustained growth under their belt, generating considerable returns for investors.
Of course, as with any other type of investment there is risk. The value of ethical products can go up as well as down but the way to protect yourself against market downturns is to make sure that your portfolio is sufficiently balanced. Consider spreading your money across a range of different asset classes and geographical regions to help protect yourself from market fluctuations. You could also think about investing in a number of different funds rather than putting all your eggs in one basket.
If you live or work in Brussels, Belgium (the centre of the EU itself) there is a local investment consultancy which aims to connect investors with "true" ethical funds. Investing in an ethical fund is a way for Belgian investors to invest in companies that meet certain standards, while supporting positive social and environmental impact. The consultancy specialises in impact investing and is able to make your money work for the world and for you as an individual.
This way, you can invest in companies that are dedicated to sustainability and reducing their carbon footprint, which means in turn that you are directly helping to prevent climate change and increase the planet's resilience.
Ethical investing is a critical aspect of sustainability and serves as a key driver of socially responsible investment. The imperative is to balance the need for economic growth with social, environmental and governance factors, which are known as "ESG" factors.
To date there is no one-size-fits-all approach to determining whether an investment strategy meets the requirements of ethical investing or ESG investing. Instead, criteria vary among funds, depending on their specific mandate, risk appetite and asset allocation (e.g., passive versus active management). However, there are some general guidelines that can be used to help investors in Belgium develop informed investment decisions when selecting funds.
· Socially responsible management (e.g. not investing in companies involved in the arms trade, tobacco or child labour)
· Environmental responsibility (e.g. not investing in fossil fuel companies)
· Human rights (e.g. not investing in companies involved in human trafficking or sweatshops).
If you're a professional investor located in Belgium, and you're looking for an investment firm that will put your best interests first, speak to Monnet Capital BV. Operating as an advisor to investors and clients worldwide, Monnet Capital provides ethical investment services for individuals, businesses and non-profit organisations from their offices at Av. Louise 523, 1050 Brussels.
If you would like to know more about Monnet Capital and eithical investing in Brussels Belgium, Luxembourg and the EU Click here
Dedicated to helping you make the most of your money, Monnet Capital has a team of passionate investors and business experts who will guide you through the process of building your portfolio. They can help you pick the assets that will best serve your needs and help you make sure that your portfolio is optimised for your personal tax situation.
Even if you are new to the world of ethical investing (or investing in general), Monnet Capital can help you create a well-balanced portfolio from a variety of institutional investment portfolios and funds, across a variety of asset types, countries and currencies. Monnet Capital can also help you avoid the pitfalls of 'greenwashing', ensuring that any investment in your portfolio is effectively offset against the use of fossil fuels or other harmful activities.
Ethical investing is about more than just picking a company with a strong ESG score; it's about aligning your investments with your values so you can enjoy the future you have worked hard to create. In order to help you get started on your ethical investment journey, Monnet Capital has created a FREE PDF guide to one particular aspect of ethical investing: ESG (environmental, social, and governance) investing. In this guide you will find all of the information you need to understand the basics of ESG metric analysis and create an ethically-oriented portfolio that truly reflects your values.