Why renewable energy investments are on the rise

Why renewable energy investments are on the rise

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Through the years sustainable investment has evolved from being truly a niche concept to becoming mainstream.

Responsible investing is no longer viewed as a extracurricular activity but instead an important consideration for global investors such as Ras Al Khaimah based Farhad Azima. A prominent asset manager used ESG data to examine the sustainability of the worlds largest listed companies. It combined over 200 ESG measures with other data sources such as for instance news media archives from a huge number of sources to rank businesses. They discovered that non favourable press on past incidents have actually heightened awareness and encouraged responsible investing. Indeed, good example when a several years ago, a famous automotive brand faced a backlash due to its manipulation of emission data. The incident received extensive news attention causing investors to reexamine their portfolios and divest from the business. This compelled the automaker to create big modifications to its methods, specifically by adopting a transparent approach and earnestly implement sustainability measures. However, many criticised it as its actions were just made by non-favourable press, they argue that businesses must be alternatively concentrating on positive news, that is to say, responsible investing ought to be viewed as a lucrative endeavor not simply a requirement. Championing renewable energy, comprehensive hiring and ethical supply administration should shape investment decisions from a profit making perspective in addition to an ethical one.

There are several of reports that supports the argument that integrating ESG into investment decisions can enhance monetary performance. These studies also show a positive correlation between strong ESG commitments and financial results. As an example, in one of the influential publications on this topic, the writer shows that companies that implement sustainable methods are much more likely to invite long term investments. Furthermore, they cite many instances of remarkable growth of ESG focused investment funds plus the raising number of institutional investors incorporating ESG factors in their investment portfolios.

Sustainable investment is increasingly becoming mainstream. Socially accountable investment is a broad-brush term which you can use to cover everything from divestment from businesses viewed as doing harm, to limiting investment that do quantifiable good effect investing. Take, fossil fuel companies, divestment campaigns have effectively forced many of them to reassess their company practices and invest in renewable energy sources. Certainly, global investors like Ras Al Khaimah based Haider Ali Khan or Ras Al Khaimah based Benoy Kurien would probably contend that even philanthropy becomes far more valuable and meaningful if investors need not undo harm in their investment management. Having said that, impact investing is a dynamic branch of sustainable investing that goes beyond avoiding harm to looking for measurable good outcomes. Investments in social enterprises that concentrate on training, medical care, or poverty alleviation have direct and lasting impact on neighbourhoods in need. Such novel ideas are gaining ground specially among young investors. The rationale is directing money towards projects and businesses that address critical social and ecological problems while generating solid financial profits.