Every specialist topic has its own technical language, and beginners will probably find it just as difficult to follow a conversation among stockbrokers as it would be to follow a discussion among molecular biologists at a medical congress. When it comes to sustainable investing, you should start with a small dictionary right away; we have already filled the first few pages for you.
The trend is clear: More and more people find it important not to invest their money in just any company, but also to have a clear conscience. At first it was mainly large investors, but now more and more private individuals are investing in products that are committed to the environment, social issues and fair and responsible treatment of employees.
According to the data evaluations of the German fund association BVI, ESG retail funds managed around 463 billion euros at the end of December 2021, which would correspond to 31 percent of the total retail fund assets. Almost every sixth euro that German customers invest in funds is now invested in products with sustainability features. A year ago it was only every twentieth euro, according to the study. So big business.
Half of new fund business is eco-driven. Green investments offer numerous opportunities to contribute to a greener world. Sustainable investments such as a wind farm in Norway’s fjords or a hydroelectric power station with an impressive dam in Portugal are booming. Many providers advertise with enticing pictures of nature. But consumer advocates doubt that environmental protection is included wherever sustainability is written on it and are calling for clearer criteria for the growing market. The EU wants to ensure comparability of ESG products with a uniform taxonomy. After years of preparation, the guidelines will become binding from 2024.
Source: Stern
