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What is sustainable investing?

Written by Nik Rainer | 5 minutes

With head turning results for investments in medical hemp stocks and more blockchain tokens that are going to revolutionize the everyone in the world is going to bank (again), I want to talk about something a little more responsible and grown up this time. Sustainable investing AKA SRI (Sustainably Responsible Investing) or ESG (Environmental, Social and corporate Governance)


So what exactly is a sustainable or responsible investment? This is the definition according to the UN Principles for Responsible Investment (PRI) :
UN Principles for Responsible Investment (PRI) are a set of six principles that provide a global standard for responsible investing as it relates to environmental, social and corporate governance (ESG) factors. Organizations follow these principles to meet commitments to beneficiaries while aligning investment activities with the broader interests of society. 
What it boils down to is that the stock, company or fund that you invest in has a set of rules to abide by when they operate so that they are fair and do not damage persons or the planet and do not exploit people or countries. 

My journey to enlightenment

When I was a young City Boy in the 90’s, a rather more enlightened friend told me that they were going to invest responsibly. The returns were less than other funds, but you felt better knowing that while you were making money, it wasn’t at the expense of the planet or someone’s freedom or health.
It didn’t make sense to me at the time. Thankfully, I am now a more rounded human being (literally) and appreciate that by investing in companies that don’t contribute to misery and death is something that can have a positive impact on your wellbeing as well as your profitability. Kind of like wearing a pin stripe suit, but with Birkenstocks and friendship bracelet. 

How long have people been interested in making a difference with the way they invest?
It’s not a new concept, Sharia law forbids investing in banks and the Methodists promoted not profiting from your neighbours. It wasn’t however until the 60’s and 70’s that people in general started to invest in communities and schemes that promoted environmentalism and avoiding tobacco and firearms. 1990  saw the first  SRI mutual funds and an index was created to measure performance. 

It’s not just about the little furry animals and eating lentils either, you can make good returns

Research (Morgan Stanley, ) has shown that sustainable investment funds perform the same or better than traditional funds. However, it’s not a guarantee for the future. Of course, you may want to invest in sustainable investments for reasons other than your return. Research within our customer base indicates that more and more of our clients are investing in sustainable funds and shares. Investing in renewable energy the first choice, with water and the environment just behind. 

How sustainable are we at BinckBank part of Saxo Bank?

It’s all very well preaching, but we practice it too at BinckBank. The cooling of the spaces and equipment at our head office in Amsterdam uses as recycling heat exchange system that uses a natural process which produces a 75% CO2 reduction over conventional cooling methods. Our printers are also carefully chosen to ensure 90% less waste and 30% less energy and CO2 emissions.

How do you invest sustainably with BinckBank?

So you have decided that you want to invest for your future and the future of the planet and make a difference? If you want invest sustainably you can purchase ETFs or other instruments with our Saxo Investor and TraderGO Platforms directly yourself. 

We do not provide individual investment advice so you don’t pay for advice. You invest directly via our trading platforms that provide you with access to 36 global markets and 40,000+ Instruments such as shares, bonds, ETF’s CFD’s, FOREX, Options and Futures. We do however, have our doors open for you to visit us and discuss how you might develop your own investment strategy.
Here are just a few EFT’s (Exchange Traded Funds) that adhere to the ESG rules. 
• iShares MSCI KLD 400 Social ETF 
• SPDR SSGA Gender Diversity Index ETF
• Invesco Solar ETF
• iShares Dow Jones Global Sustainability Screened UCITS ETF
• Think Sustainable World UCITS ETF
• MSCI World Socially Responsible UCITS ETF

Alternatively if you would prefer to have your money managed on your behalf you can also invest in one of our managed portfolios. The Saxo Bank and Brown Advisory have collaborated to offer a portfolio of ethical stocks to our clients via SaxoSelect within our platform. 

You can come by our office and discuss your investments over a cup of coffee anytime at: BinckBank Urbanización La Carolina, Edificio Aries local N or contact me via email at nik.rainer@binckbank.com, or phone +34 951 56 56 56. BinckBank is part of the Saxo Bank.

Author

Nik Rainer

Nik joined BinckBank in 2016 as part of the team responsible for rolling out the Saxo Bank international service. Nik has held positions at various banking institutions such as Hambros Merchant Bank, Standard Chartered Bank and Morgan Stanley and brings his solid financial background to the role. Working with the development of new client services and relationship management, Nik also contributes to local publications and forums.

The information in this article should not be interpreted as individual investment advice.  Although BinckBank compiles and maintains these pages from reliable sources, BinckBank cannot guarantee that the information is accurate, complete and up-to-date. Any information used from this article without prior verification or advice, is at your own risk.  We advise that you only invest in products that fit your knowledge and experience and do not invest in financial instruments where you do not understand the risks. 

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