Sustainable investing, or ESG (Environmental, Social, Governance) principles, merges finance with ethics, attracting trillions in assets. Funds tracking green energy, like those in solar and EVs, have outperformed traditional ones, per Morningstar data, amid climate urgency.
Investors screen for companies with strong ESG scores via apps like Bloomberg terminals or robo-advisors such as Betterment. Impact investing supports social causes—microloans via platforms like Kiva—while generating returns. Governments incentivize with tax breaks for green bonds.
Challenges include greenwashing, where firms exaggerate eco-claims; verification through third-party audits is crucial. Market volatility tests patience, but long-term trends favor sustainability.
To begin, assess your values and risk tolerance, allocate 10-20% to ESG funds. It’s finance evolved—profitable and principled, aligning money with a better world.
