At Aneuvia, we believe in democratizing financial wellness and investment advice for the betterment of companies, communities and individuals. Here we share our insights, point of view and advice on global impact investing, corporate diversity and inclusion, new financial market trends, impact investment funds and more.
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One year ago, over 180 CEOs of top corporations, issued a statement that appeared to mark a paradigm shift in the role of business in society. The “statement on the purpose of a corporation” by the Business Roundtable, a leading corporate lobbying group, promised to “deliver value” not merely to shareholders, but to customers, employees, suppliers and communities. Simply put, growth would not be prioritized over good.
This largely emulates the notion of “stakeholder capitalism,” a concept that looks beyond profit maximization and holds businesses accountable to all its investors, employees, suppliers, customers and communities. In our latest whitepaper, we provide an overview of the various sustainable investment strategies that are often employed by asset managers to support this idea of ‘finance for good.’
Also known as negative screening, exclusion remains a popular investor choice. This refers to the exclusion of companies and certain sectors based on ethical, social, environment or religious factors. Most commonly, exclusionary strategies avoid investments in companies that are fully or partially involved in gambling, alcohol, child labor, human rights violations, tobacco and other related factors. Over 20% of globally invested assets exclude companies involved in controversial activities, according to the Global Sustainable Investment Review.
ESG investing is tethered to the philosophy of ‘sustainable investing.’ It involves researching and factoring in environmental, social, and governance issues, in addition to the usual financials, when evaluating potential stocks. Companies that build sustainable businesses that improve their communities and the environment are in high demand.
Finance-first impact investing
Finance-first impact investing is when investors search for investment vehicles that offer competitive returns while yielding some form of social and environmental good. There is also limited-to-no focus on ESG factors within the underlying investment.
Impact-first impact investing
Impact investing is the notion that profit and purpose don’t need to be at odds. Instead, it refers to an investment strategy that not only generates financial returns, but also creates a positive impact. The cornerstones of impact investing is lending to social or environmental causes, and underserved communities -- whether geographic or socioeconomic.
Philanthropic investing is impact-only. The focus is on areas where social or environmental needs require 100% financial trade-off. This is also known as charitable giving.
Several companies are looking beyond financial outcomes when it comes to investment decision making. With COVID-19 presenting the world with unprecedented challenges in modern times, we at Aneuvia believe sustainable and impact investing will continue to be a priority as the world’s markets begin to recover from the impact.
View our latest whitepaper for more on sustainable and impact investing.