Sustainable Investment Moving Mainstream
The concept of sustainable finance seems to be moving mainstream. Often considered as a mean to meet social and environmental concerns, sustainable investment is gaining tremendous popularity in all sectors. Thanks to the much needed push from the PRI (Principles for Responsible Investment) backed by the United Nations, more companies and investors have realized the benefits of going green.
The present need for companies across the world is to follow the lead of successful green companies in order to invent, design and sell sustainable products and services to the consumers. Countries are encouraging investments in solar and renewable energy as these sectors hold tremendous potential for creating thousands of jobs. New regulations are being welcomed that will provide a stable environment for investment from all sectors. Many countries have created sustainable investment opportunities under which companies can enjoy transparency in rules and get the required information for investment in green economies.
Besides investment companies and banks, common people can also choose stocks from green companies for investing their money. Green companies also include startups that are involved in the creation of solar panels or bio-fuels. Green stocks and bonds are playing an important role in economic, environmental and social development. Recently, with the help of green bonds, approximately 350 million dollars were raised by the World Bank. These bonds were meant for funding emission reduction projects in the developing countries and offering good returns to the investors. With the issuance of these bonds, approximately 350 million dollars were collected in the first wave. In partnership with Swedish bank SEB, these bonds of low carbon projects in developing nations were issued to several Scandinavian investors. Once the bonds mature after duration of six years, investors will get competitive returns at the rate 3.15% per annum.
There is no doubt that sustainable investment opportunities help the investors fight against the adverse effects of climate change. It can also help them support green companies involved in environmental sustainability and poverty reduction. Green investments help investors reap a higher return in the long run but will this concept work for a long time?