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5 things to know about impact investing

By
Erin Lowry
January 3, 2018
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The sustainable investing market is worth nearly $9 trillion and millennials are leading the charge.

The millennial generation is two times more likely to invest in companies targeting environmental or social goals, according to the 2017 “Sustainable Signals” report from Morgan Stanley. But concerns still exist for novice and experienced investors alike who want to both make a profit and invest with their ethics in mind.

I won’t make as much money, right?

The common misconception about impact investing is that you will drastically decrease your returns by focusing on Environmental, Social and Governance (ESG) Criteria. Swell disagrees. You are positioned to still be diversified and receive healthy returns on your investments, even when following ESG criteria as an impact investor. You can rely on Swell to do the due diligence with the intention of finding the best options for you to maximize your profit while also respecting your ethics.

You can still be diversified

It’s true that you won’t have all the same options as an investor who elects not to value ESG criteria when investing, but you still have ample options from which you can choose, as evidenced by the variety of available Swell investment portfolios.

You also might be surprised by how many large companies are moving in the direction of sustainability. Unilever, the parent company of brands including: Dove, Hellman’s, Vaseline, Lipton tea, Klondike, and Suave, has been pushing towards minimizing environmental impact since 2009.

You can speak with your dollars

One of the best ways to make companies change and listen is to speak with your dollars. You wouldn’t shop at a store in your community if its owner was disrespectful to you and your neighbors. Impact investing gives you a chance to do the same with your investments. If more-and-more investors pivot to focus on companies who meet ESG criteria and adhere to corporate social responsibility (CSR), then it puts pressure on others to do the same.

Sustainability-focused companies perform better

The shift is coming as millennials enter the market and bring with them their preference to do business with ethical companies. In an interview by Yale Insights with Unilever CEO, Paul Polman, he said: “We measured the success ultimately in the overall success of the business. We clearly can see, as I mentioned, that brands that have a stronger purpose, are brands that are more profitable.”

You can modify your portfolio

Perhaps you have different standards when it comes to ESG and CSR. You could see the name of a company in your portfolio with which you’d rather not work based on your own experiences or beliefs. Not to worry, Swell makes it simple to remove a companyfrom your portfolio. You’re able to remove up to three companies.

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