With the recent report by the United Nations on Climate Change described as a ‘code red for humanity’, more investors may look to tackle big issues through their portfolio choices.
Kim Fournais, Founder and CEO Saxo Bank, gives some background to ESG’s upward trend.
The first eight months of 2021 has seen an incredible market performance, with equity markets reaching all-time highs, and unprecedented moves (in both directions) in speculative stocks and cryptocurrencies.
This activity taking place amidst a global recovery from the Covid pandemic has offered investors – including the many retail traders who chose to take control of their own investments during one of the most volatile stock markets in recent history – an opportunity to profit from the unprecedented market moves.
Yet profit is not the only consideration motivating investors in our modern world. In recent times, we have seen a global trend where investors have actively made choices that reflect their environmental principles. A strong drive towards purpose.
The rise of ESG (Environmental, Social and Corporate Governance) investment, where non-financial factors drive investor choice, shows how the trading and investment space is changing with the times.
In modern life, individuals are becoming increasingly mindful of their actions and the footprint they are leaving behind. Our hyperconnected world is providing individuals with more information and choice than ever before. And based on this information and awareness, they are looking to make lifestyle adjustments that can influence the issues that matter to them.
Some decide to skip long flights for summer holidays to cut down on carbon emissions, or to eat less meat to protect animal welfare and the climate.
Issue/purpose-driven investment is an extension of this attitude, where actions back up the conscience.
With the recent UN report on climate change guaranteeing that human-caused climate change will get worse, there is a growing sense that individuals need to take action.
ESG investment is one way that investors can bring about change, and at Saxo Bank, we are taking a lead in this area – a natural and obvious next step in democratising investments.
Investment decisions are some of the most important decisions choices we make. Sustainable and responsible investments are not only philanthropic and impact-driven – they can also be real drivers of profit.
Therefore, it is crucial that a larger number of people have access to the tools and information available.
Saxo Bank’s offering enables investors to align their savings with the values they want to promote and take stakes in the companies that shape the world while taking more control of their financial future.
The retail trading boom brought about by the Covid-19 crisis – one of most volatile and exuberant stock markets in recent history – has amplified the trend of citizens taking control of their own investments.
In this climate, investments and savings are poised to become ever more personalised, as people realise that their portfolios are an opportunity to deliver a real impact on the world.
Investing in accordance with personal beliefs is important, but this should also be matched with risk appetite, investment goals and time horizons.
By offering the right tools, good education and low prices, we can help investors to calibrate their savings to match their own values. In other words, we can empower clients to fulfil their financial aspirations and make an impact to better shape the world they want to live and thrive in.