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They want sustainable solutions that that do no harm, reflect their values and that make a

contribution to the things they consider important. This basic shift in demand encourage the
growth of sustainable investing. The range of products on offer is also expanding, giving investors
an option as to the extent of positive impact they make (GWM Asset Management, 2022).

Sustainable investing directs investment potential to the companies that combat climate change,
while promoting corporate responsibility. Consequently, over the last few years there has been a
growing number of voices which have stressed the significance of incorporating sustainability into
the investment process. With rapidly growing interest from investors, it has become clear that
there is an urgent need to better define the financial characteristics of this new investing paradigm,
especially concerning performance. Indeed, this was arguably the most important barrier for
institutional players who were concerned about breaching their fiduciary duty when integrating

sustainability principles in their investment decisions. However, the numerous studies published
to date have largely dispelled the myth about the trade-off between financial performance and
impact (Friede, Busch, & Bassen, 2015).

Further, companies with good ESG performance incline to have better corporate governance, and
hence the advantage of long-term sustainability, so it seems clear that ESG sustainable
companies and brands are notably more likely to be well placed to seize long term opportunities
in the future. In other words, sustainable investing is important not only because of helping shape
the world by contributing to positive social change, but it’s proven that both businesses and
individuals can benefit financially by seeking to make their companies and investments more
sustainable (Harvard Business School, 2022). Simply said, sustainable investing is important

because it can help contribute to a better world.

Sustainable investing strategies

A sustainable investing strategy is any method of investing that considers an investment's impact
in addition to its financial return. A few strategies can be continued when it comes to investing
sustainably. First of all, avoiding investing in industries or companies which conflict with moral
values. For example, people who care a lot about global warming may choose not to invest in gas
and oil companies, while those concerned with health may choose not to invest in tobacco
companies. Individuals that are concerned with global warming may instead choose to invest in
the clean energy sector. While individual investors may perform a basic initial analysis of

companies, fund managers or professional analysts will often rate exchange-traded funds (ETFs),
stocks and mutual funds by their ESG scores (Jackson, E.T., 2013).
Further, the largest sustainable investment strategy globally is ESG integration, as shown in

Figure 1, with a combined USD25.2 trillion in assets under management employing an ESG
integration approach, also being the most commonly reported strategy in most regions. The next
most commonly deployed sustainable investment strategies include negative/exclusionary
screening (USD15.9 trillion) followed by corporate engagement/shareholder action (USD10.5

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