The rise of socially responsible investing

January 16, 2019

Ethical investing

Corporate social responsibility has long been held as a priority for many businesses and business owners across Australia. The social and environmental consequences of business decision-making should be held as equally important as the economic consequences, right?

Well, in recent times, the need for ethically secure investment alternatives has also become of great importance within the Australian financial industry, particularly following some questionable decision-making surrounding crude oil and the like. But what is an ethical investment?

Ethical investing is an investment approach that aims to incorporate environmental, social and governance (ESG) factors into investment decisions, to better manage risk and generate sustainable, long-term returns.

This means proactively looking for investment opportunities that incorporate positive environmental and social outcomes. While there are no hard and fast rules on what constitutes an ethical investment, it’s safe to say it avoids investment in companies that take little notice of the social and environmental cost of doing business.

There are several ways to go about ethically investing, the simplest approach is to invest in companies that you deem ‘ethical’. These investments can be segmented out as industries and companies you don’t wish to invest in or choosing only to invest in companies you believe have a positive effect socially or on the environment.

Alternatively, you can invest through an ethical listed investment company through an exchange traded fund or a managed fund. All of these options will be managed by a professional manager, with options hand-picked for their ethically responsible qualities as well as their return potential.

In a world that is constantly becoming more socially aware and where our actions are becoming increasingly scrutinised through the visibility provided by social media, investors are demanding investments that not only yield a good return, but that do good as well. Investors are no longer motivated purely by profits, but by concern over the state they will leave the planet in for their children and grandchildren.

This is a sentiment wholly shared by Timelio, which is why we have teamed up with Carnbrea & Co to secure funding that will not only help grow Australian businesses but will have a positive impact on the future for all Australians.

The investment product, known as the Timelio Global Ethical Income Fund (TGEIF), delivers ESG investment opportunities in the Timelio marketplace on behalf of superannuation investors seeking to diversify their existing portfolio with alternative investments.

With the world’s largest asset manager, BlackRock Inc., forecasting epic growth over the next 10 years for funds following the ESG investing principles, Timelio’s TGEIF offering provides a key injection of capital to fuel further growth of Timelio’s Invoice Finance marketplace.  

Socially responsible and ethical business practices will only continue to boom in the coming years. Jumping on the ESG movement early is a sure-fire way to diversity your investment  portfolio with solid and secure returns, in a way that is ethical and principled.

 

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