21st April 2022
M&G: How sustainable investing can deliver both profits and a positive impact
People increasingly understand that having a sustainable investment portfolio isn't simply good for people and the planet, but it can also generate sound financial returns.
Sustainable investing is on the increase and has now gone “mainstream”, according to the World Economic Forum. So, when and why did it become so popular?
“The ratification of the UN Sustainable Development Goals in 2015 didn't exactly open the floodgates to sustainable investing,” says Ben Constable-Maxwell, Head of Impact Investing, M&G. “But it did get policymakers, businesses - and investors - speaking the same language about the goals that society needs to address.
“And rightly so, because the scale of the challenges we face, whether climate change, biodiversity loss, poor health or social exclusion, requires a systemic response. These are becoming dominant issues for governments globally, as well as being increasingly front and centre for sustainable investors. Progress has been made, but there is much still to do.”
The simple way to explain sustainable investing is "investing for the long-term in businesses that are aligned with society's objectives and supporting the suatainability agenda," notes Constable-Maxwell.
“That can mean avoiding investment in bad actors that are harming people and the planet, or aligning portfolios with businesses that promote fair pay and decent work, or even Investing to drive real-world positive change.”
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