What is sustainable investing?
In addition to the traditional investment criteria of return, risk and liquidity, sustainable investing also takes into account factors such as the environment, social matters and governance (ESG).
Investing sustainably: The most important terms
Do you want to take sustainability aspects into account when investing? Then you might come across these three abbreviations:
What is ESG?
ESG stands for environmental, social and governance. These criteria can help investors assess how sustainable and ethical a company is. Environment (E) refers to the use of natural resources and climate protection. Social (S) covers topics such as working conditions and human rights. Governance (G) deals with transparency, ethics and management practices.
What does SDG mean?
The SDGs, or Sustainable Development Goals, are the UN’s 17 global goals to be achieved by 2030. Among other things, they aim to combat poverty, protect the planet and promote prosperity for all. Companies and investors can use the SDGs to develop sustainable strategies with a focus on positive change.
What does SRI stand for?
SRI stands for socially responsible investing. SRI investors often avoid companies operating in unethical or environmentally harmful industries, such as fossil fuels or tobacco. Instead, they invest in companies that are committed to environmental protection, fair working conditions and social fairness.
Responsible or Sustainable?
Zürcher Kantonalbank offers various investment opportunities that take sustainability criteria into account. This is how the sustainable investments differ:
The responsible approach
The Responsible sustainability approach includes investments in which ESG criteria (environmental, social, governance) are incorporated into investment decisions. The aim is to invest in companies that act ethically and sustainably while minimising financial risks. Various sustainability mechanisms are used for this purpose (e.g. exclusion criteria).
The sustainable approach
The Sustainable approach goes one step further and focuses on investments in companies that actively contribute to the achievement of sustainability goals through their products or services. Swisscanto offers sustainable investment products that focus on investments in companies and projects that can have positive environmental and social impacts, such as renewable energies or social infrastructure.
What sustainable investing can mean
- Focus on sustainability goals: Sustainable investments may favour investments in companies that seek to reduce CO2 emissions and environmental impact and promote the responsible use of resources.
- Long-term-oriented return: Companies that operate sustainably are often better prepared for future challenges and offer the possibility of long-term stable returns.
- Social responsibility: Sustainable investments can take into account whether companies treat their employees fairly and support social fairness.
