Can Your Investments Solve Climate Change?

In recent years, there has been a growing urgency for investors to push for more than just financial gains. In the second of this two-part feature, we unearth what it means to invest in companies that are making strides in reducing their environmental footprint.

- Karishma Tulsidas

Whether your investment portfolio consists of equities or bonds, you would have probably started out on your investment journey with one clear mandate: Make your money work for you. But there's been an added dimension to this equation: What impact does the company you're investing in have on people and the planet?

This has become especially apparent in the corporate world, where ESG (Environment, Social and Governance)-linked investments have been gaining momentum. These include stocks, bonds, exchange traded funds (ETFs), mutual funds, and managed portfolios.

Samantha Horton, chief business officer of investment platform Syfe, notes that since the company launched the ESG and Clean Energy thematic portfolio in 2021, it has seen a growing interest from investors.

She says: "In 2021, Syfe introduced a suite of thematic portfolios designed for investors to tap into the opportunities presented by megatrends or long-term structural shifts. To date, the total number of 'ESG and Clean Energy' portfolios forms over 40 per cent of the total portfolios created across Syfe's five thematic portfolios. In fact, it is almost double our next popular theme of disruptive technology. This shows the significant demand and growth for sustainability-related investments. 'ESG and Clean Energy' is also the most popular theme for women, with 42 per cent of women who invest in thematic portfolios selecting our ESG portfolio."

Previously, we examined the social and governance aspects of the ESG equation in the first of this two-part series, and explained how investors such as you and I can vote with our wallets to influence how companies are building equitable, diverse and inclusive ecosystems.

Here in the second part, we explore how ESG investing can help the environment.

ESG AS AN INSTRUMENT FOR CHANGE