What’s the difference between ethical investing and sustainable investing?19 Mar 2020 2 min read
Ethical investing means restricting investment to companies or industries that match the ethics or values of the investor, using this as the primary filter for investment choices. So if you’re investing ethically, you may choose not to invest in companies who engage in specific industries; you may also choose to invest more in companies that align with your beliefs. What those beliefs are will depend on you, the individual investor. As an ethical investor, you may also be prepared to accept lower returns on your investments as the ‘price’ for investing according to your beliefs.
Sustainable investing, as the name implies, is about sustainability, defined as a focus on meeting the needs of the present without compromising the ability of future generations to meet their needs. In short, it’s about taking the long-term view, with regard to returns, risks and environmental and social impacts. It does not assume that investors should have to accept lower returns.
In practice, there is a considerable degree of overlap between the two. The Environmental, Social and Governance (ESG) and responsible investment principles that might once have been considered only by ethical investment managers are now adhered to by many.
What’s NGS Super’s position?
We believe strongly in integrating Environmental, Social and Governance (ESG) and responsible investment principles into the management of our investment portfolio. This is not a new thing for us; NGS Super first became a signatory to the United Nations Principles of Responsible Investment in 2009/10.
As an Industry SuperFund, we’re also committed to applying the concept of sustainability to our members’ returns and delivering the best possible retirement outcomes for our members. We believe that incorporating sustainability into our investment processes helps us to achieve this. You can find out more about what we do on our Fund sustainability page.