Why renewable energy investments are surging

Why renewable energy investments are surging

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Over time sustainable investment has developed from being fully a niche concept to becoming mainstream.

There are a number of reports that back the argument that integrating ESG into investment decisions can enhance financial performance. These studies show a stable correlation between strong ESG commitments and financial performance. As an example, in one of the authoritative publications about this topic, the author demonstrates that businesses that implement sustainable practices are much more likely to invite long term investments. Additionally, they cite many examples of remarkable development of ESG focused investment funds plus the raising number of institutional investors combining ESG considerations in their investment portfolios.

Responsible investing is no longer seen as a extracurricular activity but rather an important consideration for international investors such as Ras Al Khaimah based Farhad Azima. A prominent asset manager utilized ESG data to look at the sustainability of the worlds largest listed companies. It combined over 200 ESG measures along with other data sources such as news media archives from several thousand sources to rank companies. They discovered that non favourable press on recent incidents have actually heightened awareness and encouraged responsible investing. Certainly, very good example when a several years ago, a well-known automotive brand name faced repercussion due to its adjustment of emission data. The event received widespread news attention leading investors to reassess their portfolios and divest from the business. This pressured the automaker to create major modifications to its practices, particularly by adopting a transparent approach and earnestly apply sustainability measures. Nevertheless, many criticised it as the actions were only made by non-favourable press, they suggest that businesses should be alternatively focusing on good news, that is to say, responsible investing must be viewed as a lucrative endeavor not simply a necessity. Championing renewable energy, comprehensive hiring and ethical supply management should encourage investment decisions from a profit making viewpoint as well as an ethical one.

Sustainable investment is increasingly becoming popular. Socially responsible investment is a broad-brush term which you can use to cover anything from divestment from companies viewed as doing damage, to limiting investment that do measurable good effect investing. Take, fossil fuel companies, divestment campaigns have successfully compelled most 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 likely assert that even philanthropy becomes far more effective and meaningful if investors need not reverse damage in their investment management. Having said that, impact investing is a vibrant branch of sustainable investing that goes beyond avoiding harm to looking for measurable good outcomes. Investments in social enterprises that give attention to education, healthcare, or poverty alleviation have direct and lasting impact on societies in need. Such ideas are gaining ground especially among young wealthy investors. The rationale is directing money towards investments and companies that address critical social and ecological problems whilst creating solid monetary profits.