Impact investing vs. socially responsible investing
Every new investor is often confused about the right companies to invest in and the right strategy to adopt. While financial gains are the primary goal of any investment, investors are now getting conscious of the social impact of their investments as well. Among the different strategies that investors use to build and diversify their portfolios, sustainable investing is causing the most ripples in the space. This emerging trend is revolutionising the way businesses and investors approach investments. It is also urging organisations to adopt a more sustainable approach to their business operations. What does it mean to invest sustainably? Decades ago, John Wesley, founder of the Methodist movement, termed stocks that invest in gambling, weapons, tobacco, alcohol, etc., as ‘sin stocks’, and urged his followers to not invest in them. In the first instance, this approach may seem foolish to you. But think about it, your investment is nurturing these companies. Isn’t it a good way to make the world a better place by refusing to invest in unethical brands and products? Sustainable investing involves a thorough assessment of the environmental, social, and corporate governance aspects of an organization. Your investment