The future of responsible investing

Last week, the responsible investing community came together at the Responsible Investment Association Australasia (RIAA) Aotearoa conference to discuss the latest trends and challenges in responsible investing. The event covered everything from practical tips on how to discuss sustainable investment options with clients to in-depth conversations on global issues such as climate change, biodiversity, modern slavery, greenwashing, and corporate responsibility.

The wide range of topics shows how rapidly the world of responsible investing is evolving and how many areas it touches. It was inspiring to see how people are trying to align their investments with values that make a positive impact on society and the environment. By sharing knowledge and working together, we’re helping to drive positive change through the companies we choose to invest in.

Through the various topics and sessions, a consistent message emerged: investing responsibly isn’t going to be straightforward, however can be helped by considering these principles.

Transparency

No matter what type of investment you are considering, such as a fund or an individual company, transparency is essential. These investments need to be open about their approach to and progress in sustainability, enabling investors to make informed decisions that align with their values. Clear communication fosters trust and supports a more meaningful engagement with stakeholders.

Authenticity

What is driving the strategy for each company you invest in? Are its efforts in sustainability motivated by regulatory compliance or competitive pressure, or are they rooted in the core values of the organisation? It’s crucial that it is genuine in its approach. Companies that embed sustainability into their core strategy are more likely to succeed in creating long-term value for both investors and society.

Inclusivity

It’s not just about the changes each company is making on its own but also bringing others along on the journey. For example, when a company is addressing modern slavery in its supply chain, it’s more effective to educate and support suppliers in implementing ethical practices rather than simply severing ties. This approach fosters a collective movement towards better standards and practices.

Collaboration

No single investor can solve the world’s complex challenges alone. Addressing issues like climate change requires substantial investment in innovative technologies and collaborative action across sectors. We need to work together to drive the systemic change required for a sustainable future. By investing in businesses that are driving progress, you become part of a larger effort to address issues like climate change and social inequality.

Courage to start

Don’t let the fear of imperfection stop you from taking the first step. Starting your responsible investing journey, even with small or imperfect choices, is better than doing nothing. Focus on learning and making incremental improvements—your impact will grow over time.

You don’t have to do this alone. Here at Craigs, we have a dedicated sustainability research team that work alongside our advisers to help clients invest sustainably. We also have developed company sustainability scores which provide a snapshot of how companies rate across three key areas of business sustainability – environmental, social and governance (ESG).

Leaving the conference, I felt optimistic about the role we can all play in directing capital towards addressing the biggest sustainability challenges of our time. So, I ask you: how will you begin to shape your investment journey towards a better future for all?

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