Sustainable Investing: What It Is and How It Can Help Improve Your Portfolio

Sustainable investment is an investment in an economic activity that contributes to an environmental or social objective, without significantly harming any environmental or social objective and with companies following good governance practices. Funds with a sustainable investment objective aim to invest in economic activities that contribute to a sustainable objective, such as decarbonization, greenhouse gas emissions, biodiversity, the circular economy or other environmental Sustainable Development Goals (SDGs). They can also invest in activities that contribute to a social objective, such as social integration, labor relations or human capital, or contribute to the social SDGs in other ways. These investments must not significantly harm sustainable objectives and comply with Article 9 of the EU's Sustainable Financial Disclosure Regulation. The combination of traditional investment approaches with environmental, social and corporate governance (ESG) knowledge has led investors to generate more comprehensive analyses and make better investment decisions.

Investment advisors should evaluate their objectives, time horizon and individual circumstances before asking about the client's possible sustainability preferences. To avoid misrepresentation, they must determine the proportion of the client's investments in sustainable investments, or the consideration given to adverse impacts, identifying the products accordingly. Whether you're an individual investor who wants to make more informed decisions or a business leader concerned about sustainability, completing an online course focused on sustainable investment can be an effective way to quickly gain the knowledge and skills you need to succeed. Sustainable investment ensures that companies are not judged solely by short-term financial gains, but by a broader view of what they contribute to society and how they contribute to society. For example, if 25% of a company's revenues are aligned with environmental objectives and it does not significantly harm these objectives in the rest of its business activities, then an investment in the entire company is considered sustainable. All Danske Invest funds focus on reducing what are known as sustainability risks to protect their investments.

Sustainable investing is a great way for investors to make more informed decisions while also helping improve their portfolios and the world.